Harvest ETFs Monthly Insights (November 2024 Summary)
Harvest ETFs
Consistent monthly income and growth-focused investment solutions designed for Canadian investors.
Policy Expectations Fuel Market Gains and A Challenge for Healthcare
The S&P 500 hit another all-time high during the month of November 2024. ?This was driven by political and policy questions that dominated headlines since early November. Future policy promises, in areas like cryptocurrencies, banking and industrials, were catalysts for the market. The new administration brings a certainty that markets have reacted positively towards. Remarkably, market expectations for volatility have come down dramatically for 2025 when compared to the volatility expectations prior to the election this year.
In this climate, the market can refocus on positive economic data that supports a soft landing. That should put the spotlight on key areas that are set to benefit from these developments.
There were strong performances across broad sectors in the month of November. Technology, industrials, US banks, consumer discretionary, global utilities, travel, even Canadian equities all put together a strong showing. ?This resulted in the Harvest Diversified Monthly Income ETF (HDIF:TSX) and the Harvest Diversified Equity Income ETF (HRIF:TSX) that have exposure to these sectors via underlying Harvest ETFs; HTA, HIND, HUBL, HBF, HUTL, TRVI/TRVL, HLIF, all recently hitting their 52-week highs.
Asset allocation strategies continue to be a way for investors to pursue a one ticket solution for a diversified portfolio. However, what’s lacking is a higher distribution frequency and more meaningful distribution payments. The Harvest Balanced Income & Growth ETF (HBIG:TSX) and Harvest Balanced Income & Growth Enhanced ETF (HBIE:TSX) ?were designed to fill this gap. They offer balanced covered call strategies – one without leverage and one with leverage – that have about 60% in equities and 40% in fixed income. The equities and fixed income exposures come from investing in other ETFs and primarily from those ETFs that use a covered call strategy.
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The Healthcare sector was the outlier and struggled through the month of November 2024. The sector was volatile. It was driven by the general positive economic news of the day and associated outlook (see discussion above) as well as some company specific related news. We discuss in detail some of the recent movers and activity within the Fund over the past month in monthly fund commentary.
The Harvest Healthcare Leaders Income ETF (HHL:TSX) is a diversified portfolio of 20 healthcare leaders that offers investors the opportunity to tap in that diversification . HHL is celebrating its 10-year history this month (December 2024). Since its existence (December 18. 2014), it has paid the same or higher cash distribution every month. Despite recent pullbacks in healthcare, HHL remains one of the top performing healthcare ETFs over 1, 2, 3, 4, and 5 years in Canada.
As we look ahead to the next four years, investors can expect random tweets and all sorts of noise that will likely cause volatility. The US administration transition is in full swing, so those headline risks will remain in the near term. There are some other factors to consider in December.
It has been a strong year across the board, but this is tax loss selling time. That can mean that stocks that are down for the year have more selling than they normally would. There can also be air pockets during this time of year as markets can gap up. On December 24, 2018, this occurred when US markets were set to close early. When most people are “on one side of the boat”, that can exacerbate very short-term moves.
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Investors should focus on maintaining diversity and focusing on fundamentals going forward. We look forward to a prosperous 2025 for all.
Happy Holidays!
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ABOUT HARVEST ETFs:
Founded in 2009, Harvest Portfolios Group Inc. is an independent Canadian Investment Fund Manager. At Harvest, our guiding principles are premised on building wealth for our clients through ownership of strong businesses that have the potential to grow & generate income over the long term. Harvest has an established track record with its stable of Equity ETFs and Fixed Income ETFs. Now, in 2024, Harvest has expanded its income philosophy to introduce Balanced Income ETFs to our innovative lineup. These portfolios are invested in ETFs listed on a recognized North American stock exchange that provide exposure towards large capitalization equity securities, investment grade bonds or money market instruments issued by corporations or governments and will include ETFs that engage in covered call strategies. Read More
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DISCLAIMER:
For information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein or used to engage in personal investment strategies. Please consult your investment advisor.
Certain statements in this document are forward looking. Forward-looking statements (“FLS”) are statements that are predictive in nature and depend upon or refer to future events or conditions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. Unless required by applicable law, Harvest Portfolios Group Inc. does not undertake, and specifically disclaim, any intention or obligation to update or revise any FLS, whether as a result of new information, future events or otherwise.
Commissions, management fees and expenses all may be associated with investing in Harvest Exchange Traded Funds (managed by Harvest Portfolios Group Inc.). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account income taxes payable by any security holder that would have reduced returns. The funds are not guaranteed, their values change frequently, and past performance may not be repeated. Tax, investment and all other decisions should be made with guidance from a qualified professional.