UTES:CA: Neither Bull Nor Bear Market Allows This Canadian Utilities ETF To Outperform

DeVas Research
1.32K Followers
(12min)

Summary

  • The Evolve Canadian Utilities Enhanced Yield Index Fund aims for high dividend yields through investments in resilient Canadian sectors and covered call option selling.
  • Despite an 18% annualized yield, UTES:CA's performance has been poor, underperforming the broader market by 17%, leading to potential negative returns for investors.
  • The fund's covered call strategy limits upside in bull markets and offers no downside protection in bear markets, making it unsuitable for current market volatility.
  • Without employing more sophisticated options strategies, UTES:CA is likely to continue underperforming, prompting my Sell rating due to the slim chances of market stabilization.

Bull and Bear in Gold in front of a bar graph - background is a scale paper. Concept for stock exchange

aprott/iStock via Getty Images

The Evolve Canadian Utilities Enhanced Yield Index Fund (TSX:UTES:CA) is a Canadian, CAD-unhedged, sector-focused ETF with a very specific agenda, as the name itself suggests: to give investors a high dividend yield from investments in economically resilient domestic

This article was written by

1.32K Followers
I have been a keen student of the markets for several years now. I love studying how companies grow over time, what value they deliver to their stakeholders, and projecting long-term value as an investment opportunity. I work as a content professional for a software company, but my passion is capital markets.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About UTES:CA ETF

SymbolLast Price% Chg
Expense Ratio
Div Frequency
Div Rate
Yield
Assets (AUM)
Compare to Peers

More on UTES:CA

Related Stocks

SymbolLast Price% Chg
UTES:CA
--