Over 8x The Yield of US Health Care stocks 2

TSX: XLVE

7.9% Yield 1

 

monthly distribution

 

 

[1] Distribution Yield based on most recently declared distribution annualized,
as a percentage of the net asset value on January 31, 2024.
Actual yield changes daily based on market conditions

[2] 8x the yield of the S&P 500 Equal Weight Health Care Index

 

 

Fund Overview

Print

Overview

Mulvihill U.S. Health Care Enhanced Yield ETF “XLVE” provides exposure to a portfolio consisting principally of U.S. health care issuers. Modest leverage of 25% enhanced the dividend yields of the underlying stocks and provides additional return potential. Option writing strategies are utilized to enhance portfolio income. The funds pays monthly distributions with a 7% yield target per annum.

 

Objectives

The Mulvihill U.S. Health Care Enhanced Yield ETF seeks to provide Unitholders with long-term capital appreciation through exposure to a portfolio consisting principally of U.S. health care issuers selected from the S&P 500 Index that are classified as “health care” by Standard & Poor’s Global Industry Classification Standard and monthly cash distributions.

 

Name Ticker Current NAV Current Yield Recent
Distributions
Most Recent
Distribution Date
Distributions
Since Inception
Mulvihill U.S. Health Care Enhanced Yield ETF XLVE $8.72 7.95% $0.06 2024-02-29 $0.70

Fund Features

Investment Strategy

In order to achieve its investment objectives, the Mulvihill U.S. Health Care Enhanced Yield ETF will invest in an actively managed portfolio comprised principally of securities from the S&P 500 Health Care Index. The Mulvihill ETF may also invest up to 25% of its net asset value in securities included in the S&P Global 1200 Health Care Index and the S&P/TSX Composite Health Care GICS® Index (that are not included in the S&P 500 Health Care Index). The Mulvihill ETF will also write call and put options on a portion of its portfolio to seek to generate investment returns and, in the case of put options, acquire securities at predetermined prices in a manner that reduces acquisition costs. The Manager may, from time to time in its discretion, hedge all or a portion of the foreign currency exposure of the Mulvihill U.S. Health Care Enhanced Yield ETF’s portfolio back to the Canadian dollar.

 

Distributions

The Fund expects to make distributions monthly that may consist of net income, net realized capital gains and/or return of capital, if any.

 

Eligibility

RRSPs, DPSPs, RRIFs, RESPs and TFSAs

 

Management Fees

The Fund pays a management fee of 0.65% of net asset value annually to Mulvihill Capital Management for acting as the Manager and the Investment Manager.

 

MER

The Management Expense Ratio (“MER”) is the sum of all operating expenses, including management and service fees but excluding portfolio transaction costs, expressed as a percentage of average net asset value.

 

Inception Date

02/14/2022

 

Manager

Mulvihill Capital Management Inc.

 

 

Historic Net Asset Value Per Unit

Print

 

Date:   NAV Per
Unit
2024-02-29    $8.72 
2024-02-28    $8.77 
2024-02-27    $8.87 
2024-02-26    $8.86 
2024-02-23    $8.93 
2024-02-22    $8.88 
2024-02-21    $8.81 
2024-02-20    $8.77 
2024-02-16    $8.78 
2024-02-15    $8.78 
2024-02-14    $8.71 
2024-02-13    $8.61 
2024-02-12    $8.73 
2024-02-09    $8.69 
2024-02-08    $8.69 
2024-02-07    $8.72 
2024-02-06    $8.74 
2024-02-05    $8.62 
2024-02-02    $8.64 
2024-02-01    $8.68 
2024-01-31    $8.58 
2024-01-30    $8.60 
2024-01-29    $8.65 
2024-01-26    $8.59 
2024-01-25    $8.55 
2024-01-24    $8.52 
2024-01-23    $8.61 
2024-01-22    $8.62 
2024-01-19    $8.59 
2024-01-18    $8.58 
2024-01-17    $8.55 
2024-01-16    $8.61 
2024-01-15    $8.65 
2024-01-12    $8.65 
2024-01-11    $8.69 
2024-01-10    $8.70 
2024-01-09    $8.66 
2024-01-08    $8.67 
2024-01-05    $8.57 
2024-01-04    $8.57 
2024-01-03    $8.54 
2024-01-02    $8.65 
 

Distributions & Tax

Print

Mulvihill U.S. Health Care Enhanced Yield ETF pays monthly distributions targeting a 7% yield per annum.

Distributions are not fixed but are reviewed and set annually at the discretion of the Fund.

 

Most Recent Distributions

Name Ticker Current Yield* Recent
Distributions
Most Recent
Distribution Date
Distributions
Since Inception
Mulvihill U.S. Health Care Enhanced Yield ETF XLVE 7.95% $0.06 2024-02-29 $0.70

 

 

 

Tax and Distribution Summary Year Selection:  

 

Record Date Regular Distribution Special Distribution Total Distribution Capital Gains
per Unit
Div. Income per Unit Return of Capital Interest and Other Income Foreign Dividend Income Witholding Taxes Paid
February 2024 0.058333 0.000000 0.058333 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
January 2024 0.058333 0.000000 0.058333 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
Total for 2024     $0.116666 $0.000000 $0.000000 $0.000000 $0.000000 $0.000000 $0.000000
Percent (%)       0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Distributions
to Date
    $0.758329            
 

Documentation

Print
Date:      Type:      Description
February 16, 2024 Fund Fact ETF Facts
February 16, 2024 Fund Fact ETF Facts (French)
February 15, 2024 Prospectus Final Long Form Prospectus
February 15, 2024 Prospectus Final Long Form Prospectus (French)
February 05, 2024 Press Release XLVE: Declares Monthly Fund Distribution
January 03, 2024 Press Release XLVE: Declares Monthly Fund Distribution
December 06, 2023 Press Release XLVE: Declares Monthly Fund Distribution
November 02, 2023 Press Release XLVE: Declares Monthly Fund Distribution
October 03, 2023 Press Release XLVE: Declares Monthly Fund Distribution
September 05, 2023 Press Release XLVE: Declares Monthly Fund Distribution
August 29, 2023 Financial Report 2023 Semi-Annual Report
August 29, 2023 Financial Report 2023 Semi-Annual Report (French)
August 29, 2023 Press Release XLVE: Announces Semi-Annual Results 2023
August 02, 2023 Press Release XLVE: Declares Monthly Fund Distribution
July 05, 2023 Press Release XLVE: Declares Monthly Fund Distribution
June 06, 2023 Press Release XLVE: Declares Monthly Fund Distribution
May 03, 2023 Press Release XLVE: Declares Monthly Fund Distribution
April 04, 2023 Press Release XLVE: Declares Monthly Fund Distributtion
March 31, 2023 Financial Report 2022 Annual Report
March 06, 2023 IRC Report IRC Report for Mulvihill U.S. Health Care Enhanced Yield ETF
March 03, 2023 Press Release XLVE: Declares Monthly Fund Distribution
February 15, 2023 Prospectus Final Long Form Prospectus
February 02, 2023 Press Release XLVE: Declares Monthly Fund Distribution
February 01, 2023 Press Release XLVE: Mulvihill Launches Mulvihill U.S. Health Care Enhanced Yield ETF

Portfolio Manager Updates

 

There are no portfolio manager updates available for this fund.

Administration & Governance

Introduction

Mulvihill Capital Managent Inc. serves as the Manager and the Investment Manager of the Fund.

 

Manager

The Manager is responsible for providing or arranging for the provision of administrative services to the Fund including but not limited to:

  • authorizing the payment of operating expenses incurred on behalf of the Fund,
  • preparing financial statements and other accounting information,
  • ensuring that unitholders are provided with annual and semi-annual reports and other reports as required by applicable law;
  • ensuring the Fund complies with regulatory requirements;
  • calculating and arranging for the payment of distributions;
  • negotiating any contractual agreements with third-party providers of services to the Fund, including auditors, printers, registrar and transfer agent
  • Overseeing and paying quarterly and annual redemptions;
  • Maintaining the website and ongoing communication with investors.

The Management fee payable to the Manager includes any amount payable to the Investment Manager.

 

Investment Manager

The Investment Manager is responsible for making all investment decisions and managing the call option writing program in accordance with the investment objectives, strategies and restrictions of the Fund. Fees for the provision of investment management services are included in the management fee.

The Investment Manager has an asset mix committee consisting of senior members of the firm. The investment process for the Fund begins at the asset mix committee. Members of this committee meet monthly to examine macro-economic variables and relationships among dominant economic factors. This process culminates in an outlook for the various capital markets around the world and provides the Fundamental basis for Mulvihill’s long-term market outlook. These views are integrated into the investment decision making process at the portfolio management level. The asset mix committee of Mulvihill oversees investment decisions made by the portfolio managers of the Fund.

 

Independent Review Committee

The Fund has established an Independent Review Committee (“IRC”) in accordance with National Instrument 81-107 – Independent Review Committee for Investment Funds (“NI 81-107”) which is comprised of three members who are independent of the Manager. The mandate of the IRC is to review and provide its decisions to the Manager regarding any conflict of interest matters relating to its management of the Fund that the Manager has identified and brought to the committee.

A conflict of interest matter is a situation where a reasonable person would consider the Manager or an entity related to it to have an interest that may conflict with the Manager’s ability to act in good faith and in the best interests of the Funds and Securityholders. Click here for the IRC Report to Securityholders.

Click here to review members of the IRC.

 

Trustee and Custodian

Trustee: Mulvihill Capital Management Inc.
Custodian: RBC Investor & Treasury Services

 

Registrar and Transfer Agent

TSX Trust

 

Legal Counsel

Osler Hoskin & Harcourt LLP

 

Auditors

Deloitte & Touche LLP

Financial & Regulatory

The Annual Report and the Interim Report include the Management Report on Fund Performance and the Financial Statements of the Fund.

Report Year:      Release Date Description
2023 August 29, 2023 2023 Semi-Annual Report
2023 August 29, 2023 2023 Semi-Annual Report (French)

 

The Fund has adopted the proxy voting guidelines with respect to the voting of proxies received by it relating to voting securities held by the Fund. The proxy guidelines establish standing policies and procedures for dealing with routine matters, as well as circumstances where deviations may occur from such standing policies. Click here for proxy guidelines.

The Fund has retained ISS Governance Services to administer and implement the proxy guidelines for the Fund. Click here to review the proxy voting record.

 

 

XLVE

Highlights

  Fact Sheet     

 

Exposure to large-cap US Health Care Stocks

   

25% leverage is used to purchase additional shares for the purpose of writing options

   

By utilzing leverage, the portfolio generates income from option premiums while maintaining close to “full” exposure to the underlying portfolio stocks

   

This combination provides investors with the yield enhancement benefits of option writing strategies without forgoing “upside” in rising markets

   

US dollar exposure hedged back to Canadian dollars

 

1.0% 3

1.3% 4

XLVE
8.2% 5

GET MORE INCOME FROM US HEALTH CARE STOCKS

Over 8x The Yield of US Health Care stocks 2

 

Combination of modest leverage and option writing increases portfolio income.

With leverage, the dividend yield relative to the S&P 500 Health Care Index increases from 1.0% to 1.3%. Option writing increases the yield of XLVE to 8.2%.

[3] Aggregate 12-month Dividend of the S&P 500 Equal Weight Health Care
      Index as a percentage of the last monthly closing price.

[4] Aggregate 12-month Dividend of the S&P 500 Equal Weight Health Care
      Index as a percentage of the last monthly closing price, multiplied
      by 1.25

[5] Distribution Yield based on most recently declared distribution
      annualized, as a percentage of the net asset value on
      January 31, 2024. Actual yield changes daily based on
      market conditions.

PERFORMANCE

S&P 500 Health Care Index returned 4,523% since inception
outperforming the S&P/TSX Health Care Index return of -55%

 

 

 

 

1 YR

 

3 YR

 

5 YR

 

10 YR

 

SI 6

 

 

S&P 500 Health Care Index

 

7.1%

 

8.6%

 

11.2%

 

11.6%

 

11.8%

 

 

S&P/TSX Health Care Index

 

-0.7%

 

-36.2%

 

-30.0%

 

-25.2%

 

-2.3%

 

 

[6] Annualized Total Return since 09/11/1989 to 1/31/2024. Unlevered. No option writing, does not include fees or expenses.

 

 

Annualized Total Return

Impact of leverage

S&P 500 Health Care Index has returned 11.8% per annum since inception. The addition of leverage would have increased the returns.

STABLE EARNINGS & DIVIDEND GROWTH

S&P 500 Health Care Sector has provided consistent growth in earnings and dividends for over three decades

 

10%

Growth in earnings p.a.

 

 

8%

Growth in dividends p.a.

Source: Bloomberg, Mulvihill Capital Management Inc.