HBG: Hamilton Capital Global Bank ETF

slider-HBG 2017-01

HBG Actively managed

Highlights1
  • Total return of 28% in first full year, outperforming Global Banks Index (CAD) by 12%
  • Actively managed portfolio of more than 50 global bank stocks
  • Global diversification: exposure to ~15 countries
  • Quarterly distributions
  • Scroll down for HBG and HFY Manager Commentary
Targeted Attributes
  • Similar portfolio beta to the North American banks
  • Favourable valuation and positive growth trends in consensus EPS growth and dividends
  • Lower concentrations/correlations
  • Diversified by position and geography
Performance1 1 Mo 3 Mo 6 Mo YTD 1 Yr SI
Hamilton Capital Global Bank ETF 0.5% 12.8% 20.4% 0.5% 28.3% 29.7%
Global Banks Index2 -1.1% 12.6% 27.6% -1.1% 17.2% 15.4%

1. Performance since inception on January 25, 2016, as at January 31, 2017.
2. KBW Global Banks Index (GBKXN) translated to CAD.

HBG and HFY Manager Commentary

HBG: EPS for HBG’s U.S. Bank Holdings up 15% Y/Y Supported by Double-Digit Revenue Growth, Stable Credit Quality (Feb 14, 2017)

HBG: Raising U.K. Exposure; Lifting GBP Hedges; and Reducing U.S. Bank Weighting (Temporarily) Post-U.S. Election Rally (Feb 14, 2017)

HBG Celebrates One Year Anniversary (12% Ahead of Global Banks; Comparatively Low Drawdowns) (Jan 25, 2017)

U.S. Banks: Another Tough Quarter for Mega-Caps as All Four Experience Negative Q/Q EPS Growth (and Four-Year Near-Zero Growth Trend Persists) (Jan 25, 2017)

Another U.S. Mid-Cap Bank Holding to be Acquired (Jan 23, 2017)

HFY: Are REITs Set to Underperform the Financials? (Jan 16, 2017)

HFY: Universe of High(er) Yielding Global Financials includes ~400 Firms Yielding More than 5% (Jan 16, 2017)

Canadian Banks: Why U.S. Mid-Caps are Easier to Acquire (than 10 Years Ago) (Dec 8, 2016)

Reducing European Exposure on Italian Referendum Uncertainty (Nov 22, 2016)

HBG: Another Sector-Leading Quarter for HBG’s U.S. Banks: EPS up 19% Y/Y (Nov 16, 2016)

+ More commentary
Historical NAV

The chart of Historical NAV does not represent performance of HBG. The chart shows the daily movements of the NAV and does not include reinvested distributions.

Geographic Exposures3

Top 10 Holdings3
#
Ticker
Name
Country
Weight
1FRCFirst Republic BankUnited States3.9%
2CBACommonwealth Bank of AustraliaAustralia3.9%
3WALWestern Alliance BancorpUnited States3.6%
4SIVBSVB Financial GroupUnited States3.5%
5VM/Virgin Money HoldingsUnited Kingdom3.2%
6BMSXGrupo Financiero Santander Mexico (ADR)Mexico3.0%
7DANSKEDanske BankDenmark2.7%
8FNBF.N.B. CorporationUnited States2.6%
9SBNYSignature BankUnited States2.2%
10BSACBanco Santander Chile (ADR)Chile2.2%

3. As at February 14, 2017, as a percent of net asset value.

Additional Portfolio Disclosure as of February 14, 2017
  • The distribution of holdings was spread across 16 countries, including: United States (42%), Northern Europe (11%), Australia (8%), and United Kingdom and Ireland (9%), and Canada (3%).
  • HBG had 61 holdings, including 27 U.S. banks, 5 U.K. / Irish banks, 7 Northern European banks (including Netherlands and Sweden) and 4 Australian banks.
  • Of the 27 U.S. banks, 25 — representing ~93% of HBG’s U.S. bank portfolio — had total assets of less than $100 billion.
  • The U.S. banks are headquartered in 21 different states, spread across major regions, with 36% of the portfolio in the West, 21% in the Midwest, 20% in the Mid-Atlantic, 14% in the Southeast, 6% in the Southwest, and 3% in New England.
  • Direct exposure to banks domiciled in emerging markets was 9%, with 4% in India.

Overview

The investment objective of Hamilton Capital Global Bank ETF (“HBG”) is to seek long-term total returns consisting of long-term capital appreciation and regular dividend income from an actively managed portfolio comprised primarily of equity securities of banks and other deposit-taking institutions located anywhere around the globe.

HBG will seek to achieve its investment objective by investing in a portfolio of equity securities across the global banking sector. By investing worldwide, the Portfolio Adviser aims to take advantage of the most attractive opportunities in global banking, while reducing country-specific and concentration risks. The ETF’s portfolio is anticipated to include approximately 40-60 banks and other deposit-taking institutions, from over 10 countries, with a geographic split of roughly 50% U.S./Canada, 25% Europe and 25% other countries. However, the number of positions and percentages by region may vary based on the Portfolio Adviser’s assessment of the most attractive risk/reward opportunities. For certain markets, investments will be made predominantly in American Deposit Receipts (“ADRs”). HBG’s investments may be selected from any country, subsector or capitalization level of the global banking sector.  The Portfolio Adviser may, at its discretion, hedge some or all of the ETF’s non-Canadian dollar currency exposure.

The Portfolio Adviser’s investment strategies will consider both top-down themes as well as bottom-up analysis. Top-down themes may include, but are not limited to, favourable gross domestic product (“GDP”) growth, inflation and interest rate trends, fiscal and monetary policies, and regulatory trends. The Portfolio Adviser’s bottom-up investment process is primarily based on fundamental research, as well as quantitative and technical factors. Investment decisions are ultimately based on an understanding of a company, its business, and its expected outlook, including earnings growth, asset quality, capital and reserves, as well as business mix and dividend policy. The Portfolio Adviser will monitor and review HBG’s investments on an ongoing basis to try to ensure the best relative values are identified.

Distributions

Ex-Dividend Date Record Date Payment Date Payment Amount Type Distribution Frequency
2016-12-28 2016-12-30 n/a $0.14183 Non-cash Annually
2016-12-28 2016-12-30 2017-01-12 $0.11500 Cash Quarterly
2016-09-28 2016-09-30 2016-10-13 $0.11500 Cash Quarterly
2016-06-28 2016-06-30 2016-07-13 $0.11000 Cash Quarterly
2016-03-29 2016-03-31 2016-04-12 $0.03000 Cash Quarterly

The estimated annualized yield is 2.28%*. Please review the documents below for further details.

Pre-authorized cash contribution (PACC) Enrollment Form for HBG

HCP Distribution Reinvestment Plan

* Calculated using the December 16, 2016 net asset value per unit.

Documents

To view the filings of the Hamilton Capital Global Bank ETF (HBG) on SEDAR, please click here.

Summary Document

2017-01-16   HBG Summary (English)  |  (French)

Prospectus

2017-01-16   Prospectus (English)  |  (French)

Financial Statements

2016-06-30   Interim Financial Statements (English)  |  (French)

Quarterly Summary of Investment Portfolio

2016-09-30   2016Q3 Summary of Investment Portfolio

2016-03-31   2016Q1 Summary of Investment Portfolio


Disclaimer: A prospectus containing important information relating to these securities has been filed with the securities commissions or similar authorities in certain jurisdictions of Canada. Copies of the prospectus may be obtained from etf@hamilton-capital.com, www.hamilton-capital.com or on the SEDAR website (www.sedar.com).

Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Hamilton Capital Partners Inc. (the “Hamilton Products”). The Hamilton Products are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Hamilton Products. Please read the prospectus before investing.

Are you an accredited investor?

Products offered by Hamilton Capital Partners Inc. have a minimum subscription amount of $150,000, unless you meet the definition of an "accredited investor" under National Instrument 45-106 Prospectus and Registration Exemptions.

If you meet the definition of an "accredited investor", you may invest a minimum of $25,000. Please consult the offering documents to determine your qualification status. Investment Advisors should consult their company's internal policies.

The Subscriber must be (and will be at the time the Subscription is executed) an accredited investor under National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106")

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