Health Care

First Asset is excited to offer a new ETF solution:

The First Asset Health Care Giants Covered Call ETF (CAD Hedged - TSX: FHI, Unhedged - TSX: FHI.B).

Global demand for health care products and services continues to rise on an incredible trajectory. Among the key drivers of this demand is an aging population contributing to a constantly growing number of patients and rise in chronic disease management. When combining this reality with the fact that the majority of governments are not spending on health care at the same rate as this increasing demand, health care companies are positioned to play a greater role in the overall supply, innovation and delivery of much-needed medical services and care.

FHI and FHI.B are efficient investments to obtain exposure to the growing and expanding health care sector.

Benefits and Advantages

  1. Access a diversified portfolio of the 20 largest health care companies listed in North America on a CAD-hedged or unhedged basis
  2. Covered call option writing program offers potential for:
    1. Additional income from option premiums; and
    2. Volatility mitigation.

In addition to market demographics, valuations within the health care sector appear to be attractive as it currently trades at a discount on a relative P/E ratio basis.

Relative P/E of Health Care vs. S&P 500 Index

1. A P/E ratio suggests the willingness investors would pay per dollar of earnings for a given company. Valuations of US large cap health care stocks remain attractive to the broader market as the relative P/E ratio of the S&P 500 Health Care Index is below the broader market 10 year P/E average.


Investment Methdology

First Asset Health Care Giants Covered Call ETF focuses on large health care companies as they have the resources to fund research and development, and acquire and license new drugs – typically a time-consuming and highly expensive process. Other key features of the ETF include the following:

  1. Issuers are equally-weighted and rebalanced quarterly.
  2. Approximately 25% of the portfolio's securities will have call options written upon them at any given time.
  3. Distributions paid quarterly.
  4. Eligible for use in RRSPs, RRIFs, RDSPs, and DPSPs, as well as RESPs and TFSAs.
  5. Both CAD-Hedged (TSX: FHI) and CAD-Unhedged (TSX: FHI.B) versions available.

First Asset Health Care Giants Covered Call ETF
(CAD-Hedged - TSX: FHI) (Unhedged - TSX: FHI.B)

Learn More About FHI Learn More About FHI.B

 

Generating Income With Covered Calls

First Asset Health Care Giants Covered Call ETF includes a covered call option writing program on approximately 25% of the securities of each portfolio issuer. The benefits of a covered call option include: the potential for additional income; and volatility mitigation.