[00:00:00] Gavin: Hello, and welcome to The Gavin Graham Show sponsored

by SmartBe. Today we're delighted to have with us John Mulvihill from

Mulvihill Capital who is here to tell us about some of the option writing

strategies Mulvihill uses to generate consistent levels of tax effective income for

their investors. But also, to a certain extent, how they came to be in that position

because they're one of the longest established firms in that space. Welcome

John.

[00:00:31] John: Thanks Gavin. Thank you for having me.

[00:00:33] Gavin: Not at all. I think I'm right in saying that Mulvihill has been

going for what? Over 25 years now?

[00:00:39] John: Yeah, the firm was founded back in 1995. So a little over 25

years now, a quarter of century, which I think is pretty rare in our business to

have that sort of longevity. And, you know, in particular really since the

inception of our firm it's always been focused on the same strategy of utilizing

the options market as well within an equity portfolio. So a lot of history with the

firm and really focused on the same core strategy since inception.

[00:01:05] Gavin: And am I correct in deducing from the name of the firm that

you might have some connection, some family connection?

[00:01:11] John: Yes. Yes. So a family business. And it was actually started in

1995 when my dad purchased the investment counseling arm out of TD Canada

Trust, rebranded it Mulvihill Capital Management, and really in the mid-90s it

was the closed on fund structure where we made our name. So you know,

historically at that point option writing based strategies in Canada were really

within pension plans and they weren't brought to the masses yet in retail.

[00:01:36] And in 1995, when he purchased that, he began issuing closed-end

funds, really targeting retail and investment advisors in Canada, providing high

yield solutions for their equity portfolios and some tremendously popular

products in the late 90s and early 2000s that, you know, were very successful in

terms of raising money and providing returns for investors over time.

[00:01:55] Ultimately, I think for investors in Canada that are familiar with the

closed end funds space, exchange traded funds came along and really fixed a lot

of the structural issues that were embedded in the closed end fund space. Things

like trading at a discount to the NAV. You go out and issue a product at $10, it

trades day one at $9.40 cents because of all the issuer costs.

[00:02:14] So, you know, the closed end fund space was a great place to be for a

long time. And we've really had an evolution over the last few years of moving

the firm out of closed end funds into more mutual funds, open-ended mutual

funds, ETFs, and focusing on sort of our high net worth business as well.

[00:02:30] Again, all within the covered call, put-writing based strategies for

delivering yield.

[00:02:34] Gavin: I think you have a remark that actually if you work at

Mulvihill, it helps be called John and have a CFA because both your father and

yourself are John. Your colleague, John Germain.

[00:02:43] John: Yeah. Yeah. So one of the slides, when we give the

presentation, is highlighting the experience on the team at Mulvihill.

[00:02:49] The average tenure of the portfolio managers right now is 23 plus

years. So a lot of depth managing these strategies across market cycles. But we

throw up the the first slide and it's my dad John Mulvihill, myself John

Mulvihill, and my colleague John Germain. It lightens the start of the

presentation by highlighting that. But, you know, just on the people involved,

you know, my dad's he's had a tremendous career in finance. He won the Order

of Canada a few years back for his work in University Health Network. And

John Germain as well. He's been with the firm since 1997. Really, both of them

have been a mentor for me and John Germain in particular really acting as sort

of a middleman between a father/son combo at work. So I'm tremendously

lucky to be able to lean on both of them, as well as other people in the firm that

have been around for so long.

[00:03:32] Gavin: When did you actually join your father and the rest of the

team?

[00:03:35] John: You know, grew up in Toronto and went to McGill University,

took economics. After McGill went over to London, did a year at the London

School of Economics, came back, worked at the Ontario Teachers Pension Plan.

[00:03:44] And it was really in 2008. Great timing in the financial crisis where

the opportunity sort of aligned to join the family business at that time. There

was a lot of change obviously happening in the business. Both, you know,

around the world and in our business as well. We spun out a large portion of our

firm just after 2008.

[00:04:01] So it was a great time to bring myself in and start to learn the family

business from my dad and it's been an interesting road. But you know, we've

made it work and wouldn't change it for anything in the world.

[00:04:11] Gavin: Good to hear. Could you give us a very basic Coles Note

primer on how options work, how option writing strategies work, and contribute

hopefully can do so going forward as well.

[00:04:20] John: Sure. Yeah. So there's a lot of negative connotation with

options and portfolios. You hear horror stories out there of people blowing up

their options fund. And really what we do in the world of options is we're

writing calls and puts primarily. Which means that, you know, we're out there

selling to people and collecting premium, which really has the benefit of driving

higher income within the portfolio and lowering the overall volatility of your

portfolio.

[00:04:44] So the cleanest example, if you have a stock at 100, we go out, we

write an option premium, we collect $2. We have the ability to have $2 of

upside in the portfolio, so if the stock goes above 102, we collect that $2

premium, but we don't get any further upside. If the stock goes down, we still

collect that $2 and sort of buffer the downside.

[00:05:03] So we do this across the portfolio. I think we're quite different in the

way that we do it. And really our process has evolved over time. We've gone

from being very systematic in the way we do option strategies to very active in

the way we do option strategies, which has really helped our performance and

really taken our firm to another level in terms of, you know, communicating

with advisors and why maybe it were worth putting into their portfolio to

differentiate ourselves.

[00:05:26] Gavin: In the most basic terms, a call option is the right, but not the

obligation, to call away your stock at a price that you have written the option.

And a put option is the right, but not the obligation, to sell the stock.

[00:05:37] John: Yes.

[00:05:38] Gavin: Yeah . And you do both of those. So you're not merely

writing calls, which is what a lot of other people do. You're actually willing to

write puts as well.

[00:05:45] John: Yeah. So we're really following the volatility markets and

looking at the portfolio, seeing where the best opportunities are. So not to get

too in deep into the weeds, but there's periods of time where the volatility on put

options is higher than the volatility on call options. That's called the skew.

[00:05:59] And when we see elevated skew in the portfolio or in a particular

name, we often go and write put options instead of call options in order to

generate higher premium that way. There's times when call writing is better,

particularly when stocks are going down, we wanna write more call options

because we generate the premium and sort of the value of the call option erodes

as stocks go down and we can continuously write them.

[00:06:19] Gavin: Because I know one of the concerns people have with selling

puts, writing puts, whatever. It's you have to actually have the cash available to

buy the stock if somebody says I'm going to put it to you. And obviously that's

one of the risk controls you have in place is to ensure that you are not writing

naked puts or whatever the description is. You have the resources available.

[00:06:37] John: Yeah, absolutely. And, you know, get back to the headlines of

derivative funds that you see in the news that blow themselves up. It's always

because they're doing this naked for the most part. And so really the core of our

strategies over 25 years has been really tailored to lower risk strategies and

enhancing yield.

[00:06:52] And so whenever we write a call option, we always own the

underlying security. So if we get called away, we deliver that security. And on

the put writing side, we always post the cash collateral. So if we get put into a

stock, the cash is there in order to purchase the put at that point. And it really

certainly keeps us out of trouble in very volatile market.

[00:07:10] Gavin: Indeed. And helps your investors sleep at night.

[00:07:11] John: Yeah, exactly.

[00:07:12] Gavin: So, as you say, effectively what you're doing by writing calls

and puts, and occasionally you buy them as well, is that right?

[00:07:18] John: Yeah, very rarely. Particularly on the purchasing call options,

we very rarely do it. But, you know, there are instances where, you know, we

may want to have an exposure in the portfolio through a long call option. And

rather than maybe put 10% of our money up in order to get that exposure, we'll

just go and buy a long call option in order to get that sort of notional exposure

in the portfolio.

[00:07:37] The put options on the downside in order to preserve capital, we do

do that a little more frequently. And we have had some success doing that this

year, which has helped in these volatile markets. But, you know, not the core of

the strategy. I would say the core of the strategy is really about the option

writing in order to deliver the income.

[00:07:53] Gavin: As you say, because it does deliver a higher income than just

holding the underlying stocks. Obviously you're getting the dividends on the

stock, but on top of that you are getting the option premium that you're

generating by writing calls and puts. In general how much extra would you

anticipate or have you found that you're able to generate

[00:08:09] by doing these types of strategies? Are we doubling the yield? Are

we adding 30% or 25%?

[00:08:15] John: Yeah, there's a couple ways to tackle that. I would say pretty

clean rule of thumb would be, depending on the particular universe, would be

to, you know, the aim to double the yield of the underlying universe.

[00:08:24] But one of the things we've really had success with back in 2020,

during the COVID period was, and particularly versus dividend strategies, is

that we could own names that didn't pay dividends and still have a yield. So a

lot of investors ignored a lot of the high flying technology names back in 2020,

because they didn't pay a dividend.

[00:08:41] And what we were seeing was really high volatility and pretty

attractive stocks for that setup which allowed us to go out, sort of monetize that

higher volatility in those names that don't pay dividends, and actually deliver an

income stream on those. And it was very helpful in allowing us to outperform

during that volatile period.

[00:08:58] Gavin: Rule of thumb, aimings double maybe the underlying yield,

particularly if you are able to write options on stocks which don't pay dividends,

which should ring the overall yield of the portfolio down.

[00:09:06] So that's been, as you say, a very long term and successful strategy.

Could we then, perhaps from the general to the particular, I believe that you

have launched in the last couple of years your premium yield product, which is

in essence a portfolio designed, generated a specific level of tax effective yield

through the use of option writing strategies.

[00:09:27] Could I ask you, first of all, to tell us when you launched it and what

it's made up of?

[00:09:30] John: Yeah. So the Mulvihill Premium Yield Fund was launched in

November of 2019. Really the idea there was we really wanted to provide some

high net worth clients that we had at the time that were willing to seed this

product with a tax efficient yield in and around the 5% mark for their equity

portfolio.

[00:09:47] And obviously at that time interest rates were very low. You know,

they've been on the move more recently, but we were really providing a yield

solution for investors when we launched the product. It's really made up of an

actively managed portfolio. So going back into the history of the firm a little bit,

I guess, in the closed end fund space it was really sector based funds that we

were bringing out.

[00:10:06] So if energy was the hot play at the time, you would come out with a

closed end fund, you'd go across the country and market it, come back with

money. And if the energy sector did great, then you did great. But ultimately

you didn't have a lot of flexibility in terms of the management of the portfolio.

Over years of sort of doing this, we realized that the performance that we

wanted to achieve for our clients and the areas that we were doing best we had

the most flexibility in the portfolio to really reflect our views from an active

management perspective. So when we brought out the Mulvihill Premium Yield

Fund, we wanted to have this maximum flexibility from a couple of angles.

First and foremost, I guess, was the geographic exposure. So not just being in

Canada having the flexibility to invest in Canada or invest in the U.S.

[00:10:43] So we select from the TSX composite or the S&P 500, and then also

having the flexibility to really time sectors and factors within the portfolio. So

we're big believers that there's different points in the business cycle to own

different areas of the market. Given the volatile market so far in 2022 we've

been very much focused on defensive sectors like consumer staples and utilities.

[00:11:03] And we've sort of shied away from higher multiple areas like

technology and consumer discretionary. And that's really this year. So we have

this active management portfolio. We typically hold about 25 names in the

portfolio at any one time at about a 4% weight each. Gives you your close to a

hundred percent exposure. With that portfolio we then bring in the option

strategies, both call writing and put writing in order to enhance the yield and

lower the volatility. And again, the approach to the option writing side is very

active in terms of what we're seeing in the market and what we're seeing in the

portfolio, which I think is a real differentiating factor versus a lot of the option

strategies that you see for managers in Canada today.

[00:11:38] Gavin: It's the S&P 500 and the TSX, is there a sort of fixed

percentage in each, or does that also vary depending on what your macro

analysis of where we are in the business cycle and which markets look less or

more attractive. Does that vary as well?

[00:11:52] John: Yeah. As I mentioned, we're big believers in what we're

seeing in the cycle. And there's certain environments that we believe from a

Canadian investing standpoint. The S&P 500 could look very attractive. And

there's certain periods where the TSX, which is very commodity centric, very

financials, materials, energy focused as well, provides better value.

[00:12:08] And if you just looked at the percentage of the portfolio over time

that was invested in Canada versus the U.S. I would say back in, in 2020, when

COVID lockdowns were happening, and the markets were falling apart, we

were very much overweight the U.S. So we were approximately 70% in the

U.S., 30% in Canada.

[00:12:24] We've completely reversed that as of today. I mean, really as of the

third quarter of 2021, where the portfolio currently sits around 70% Canada and

30% in the S&P 500. Really playing a lot of the themes we're seeing today. We

want be more exposed to inflation beneficiaries, which the TSX has more of in

terms of materials and energy names.

[00:12:42] We were just looking at things like valuations in the U.S. and some

other metrics that led us to believe that perhaps the time had come after about a

decade to start to take some money out of the S&P 500 and bring it into Canada.

[00:12:53] Gavin: And you mentioned also some defensive sectors given that

with rising interest rates, because of the high level of inflation, it does look as

though we might be slowing down as on the economic side. So that would

presumably be things like utilities, consumer staples.

[00:13:05] John: Yeah. You know, when we look at defensive sectors it's really

utilities in real estate to some degree, consumer staples, healthcare kind of falls

in the middle there. All areas that we've wanted to have a lot of exposure to this

year. But also not completely take the cyclical out of the portfolio. So we did

see the inflation numbers coming and some of the energy stocks look very

cheap and really positioned to the portfolio accordingly. So it was sort of a

barbell approach of having defense in the portfolio and also some cyclical

exposure through commodity based areas that we thought were set to

outperform.

[00:13:34] Gavin: Indeed. And in fact, if one feels we might be back to the

1970s, there's a lot of people are talking about. It's That 70s Show again. Then

having sectors that did well in the seventies, like energy and materials, while at

the same time, having some defense in companies that were giving you a decent

dividend, worked out probably pretty well.

[00:13:52] John: Absolutely. And I mean, on top of that, when writing options

isn't particularly attractive in utility stocks, a couple of things that limit the

premium you generate is the dividend yield, and also the volatility that you get.

Utility stocks are lower volatility and higher dividend yields. So you don't get a

lot of option premium for writing names like that.

[00:14:08] But on the flip side, if you go to the other side of the barbell, energy

stocks are very volatile and really offer, you know, some of them have really

good yields. So the Enbridges of the world. But there's pockets that have lower

dividend yields and high volatility that provide that exposure to the energy

sector.

[00:14:22] And areas that we've owned, but been doing so with writing options

on them and getting exposure that way.

[00:14:27] Gavin: So how long has the premium yield been going?

[00:14:30] John: For a little over two and a half years, I guess. November 20th,

2019. And the performance has held in, you know, we're annualizing as at the

end of May, about 8.6% on annualized basis.

[00:14:40] The benchmark is about 4.6%, which is a blend of the S&P 500 and

the TSX composite cover call writing indices. Really the performance is one

thing and we're very happy that we've been able to outperform. But for us the

message to clients is this performance, but with the context of lower risk and

higher yield.

[00:14:56] And so we've been able to achieve that with lower standard deviation

or volatility than the benchmark. Lower draw downs, higher sharp ratios, or risk

adjusted performance. And then obviously the higher yield from the option

strategies. So when we go through our checklist and look at the three objectives

we're trying to achieve, you know, enhanced tax efficient yield, capital

appreciation above what we're paying in the distribution, and lower volatility.

Since inception we've been able to put a check mark beside each of those and

[00:15:22] Gavin: No, because that's a very important point. I think you

actually are seeing growth in the NAV because a number of the high yield

strategies we know you get a great yield, but oh my gosh that seems to be

eroding our NAV. That has not been the case with premium yield.

[00:15:35] John: Yeah. You know, I think that really comes back to the

activeness of the strategy. So if you look at some of the cover call ETFs in the

market, that have they also have very high yields, but are sort of missing the

NAV growth. It's because of the process that they use, in our opinion, and not

having that flexibility to really position the portfolio the way that we are.

[00:15:52] So just as an example, a lot of the managers that are very systematic

in their approach to writing options. So they might go out and write one third of

every name in the portfolio at one month at the money option. You know, we've

never really understood that strategy. We believe that there's names in the

portfolio that are very attractive to write and there's names that there's just no

reason to write.

[00:16:11] Gavin: Like the utilities.

[00:16:13] John: Like utilities. And not having every name in the portfolio

where you're maybe potentially selling some of your upside because you have

calls written on them I think has really helped us be able to grow the NAV over

time, and also the allocation decisions by being more in the U.S. during 2020,

and then bringing that back to Canada this year. We've been able to time that

geographic exposure pretty well.

[00:16:33] Gavin: So you're making the case for active management and also a

non systematic approach to actually option writing. Because you don't

necessarily just do options, one month options, you sometimes do shorter ones.

Especially if conditions are volatile.

[00:16:45] John: Yeah, again it comes back to the systematic approach of a lot

of our competitors. We believe there's a lot more to the options market than

what they're doing. And I think the best example I can give was back in March

of 2020, when the volatility spiked, you know, you had shorter dated volatility

was extremely high, even relative to one month volatility.

[00:17:02] So you had an inversion in the volatility curve where most ETFs and

managers are going out and rolling one month options, we began rolling weekly

options, collecting that higher volatility and really taking advantage of that

market dynamic that we were seeing at the time. So, you know, there's a lot

more, I think, to the options market than just blindly going out and writing a

specific percent of your portfolio and closing your eyes for a month.

[00:17:24] Gavin: That's where Mulvihill's 25 years plus of experience and the

very experienced nature of the team comes in. Talking specific products, I think

you've also now entered the ETF space. Could you tell us a little bit about that

new adventure for you.

[00:17:36] John: We're very excited about the prospects of getting going on our

ETF business.

[00:17:40] We launched our first fund in in February of 2022. It's really unique,

I think, to the Canadian marketplace today, in terms of the, the structure that we

brought out. And we have a few more ETFs in the works that are gonna follow

a similar sort of methodology that I'll explore here in a minute, but we're very

excited.

[00:17:56] We may be about a decade late on getting into ETFs, but we've had a

tremendous response so far in terms of flows into our Canadian bank fund. In

terms of what it's all about we launched the Mulvihill Canadian Bank Enhanced

Yield ETF, which as its name would indicate, is focused on the big six Canadian

banks.

[00:18:12] And what makes this product unique versus what else is out there is

that it's a combination of option writing and leverage. And so we take a passive

exposure more or less to the underlying big six banks. And we add 25%

leverage to that. And we put on the option writing as well. What that really

allows us to achieve is we can become the highest yielding Canadian bank ETF

in the market today. So if you look at our competitors there's some that just have

exposure to the Canadian banks. There's some that use 25% leverage. And

there's some that use option writing. But nobody else uses the option writing

and the leverage together. Which allows us to get our yield up to around 7.7%,

which is over two times the yield of the TSX diversified bank index today.

[00:18:52] So really the option strategies and the leverage, particularly on a

Canadian bank portfolio are quite complimentary in our view. You know, if you

look at Canadian banks, historically, they're very low volatility, they have high

dividend yields and they've gone up seemingly every month for the last 25

years.

[00:19:08] So not a great place to be going out and writing options each month

and capping your upside. And so really what we've done with this structure is if

you give us a hundred dollars, we go and buy a hundred dollars worth of stock

in the big six Canadian banks. And we leave that completely unencumbered

from option based strategies that we use.

[00:19:24] We then go and borrow $25 from our prime broker. And we use that

$25 to go out and purchase additional shares in the Canadian banks solely with

the purpose of performing the option strategies. So really what you end up

getting at the end of the day, in our view, is sort of an unencumbered one for

one move in the Canadian banks with that a hundred dollars and then really

focus the option writing and the yield generation on that $25 leverage.

[00:19:48] And it's had a great response. One of the things I think advisors find

very attractive is Canadian banks have tracked back this year, a little bit. And

everybody in Canada because of their weight and the index needs some

exposure. And so they're looking at this as sort of a way to have that higher

income in their portfolio.

[00:20:02] Maybe some leverage exposure, if there's a rebound and still sort of

check off the box of having the banks within the portfolio.

[00:20:08] Gavin: You said you launched that in February 2022. And already

you have over $50 million in that.

[00:20:13] John: Yeah, I think we're right around. I think it's just under $50

million right now.

[00:20:17] So we've been very happy with the uptake. And we're very excited

about having SmartBe help us on potentially some of the distribution into the

product. And we've had good conversations with advisors. And I think they're

looking at the other ETFs in the space and realizing that this is really an

improvement on what's out there and allocating accordingly.

[00:20:34] Gavin: And would that, as you said, your father was starting the

firm to bring techniques which institutions and pension funds had had exposure

to but weren't available to the retail investor. And the actual sort of particular

structure, which you've used to do that, has changed over time as a Canadian

market has changed. But, in essence, that would be the underlying philosophy

behind Mulvihill and what it tries to do is to use your expertise in option writing

to actually deliver a higher analyst volatile yields to retail investors, whether it's

for mutual funds, like the premium yield, or ETFs, like the Canadian bank

enhanced yield.

[00:21:07] John: Yeah, absolutely. And I think in all of our strategy, or

particularly the Mulvihill Premium Yield Fund, that's bang on. You know, we

wanna be very clear on what we're trying to achieve for our clients. We want to

provide upside exposure in rapidly advancing markets, but it's not gonna be to

the extent that the markets are up.

[00:21:22] And we anticipate the same on the downside. And so really over the

course of the cycle, as we look at our products, we anticipate to have market-

like returns, but really with lower tails on both sides and the higher after tax

income from the strategies.

[00:21:35] Gavin: And that's an important point, which I've neglected to

mention, now you say a higher after tax yield, because I understand that there's

a capital lost pool that you're able to access for premium yield?

[00:21:44] John: Yeah. So for the Mulvihill premium yield fund, it's quite

unique in that rather than when we brought the fund out rather than open up a

new fund structure we actually just reopened an old fund that expired in 2012,

that was an old closed done fund that had an excess of $90 million in capital

losses embedded in it. And so what that allows us to do by reopening that fund

and just changing the mandate to what the Mulvihill Premium Yield Fund is

today is to pay the distributions on an annual basis as return of capital.

[00:22:11] And so there's really a couple of ways you can get income in your

portfolio. There's interest income, there's foreign dividends, there's Canadian

dividends, there's capital gains, and there's return of capital. And return of

capital is really the best of all the options. We think the product on its own is

really attractive in terms of the return and risk profile.

[00:22:27] But having that ability to deliver the income as return of capital is

very attractive as well to clients.

[00:22:33] Gavin: Interest income you are paying top marginal rate. Dividends

you're paying. And the dividend tax rate, foreign dividends, you have 15%

withholding tax. Why would return of capital be more attractive than capital

gains?

[00:22:43] Is it the ability that you have to choose when you trigger there's tax

liabilities?

[00:22:47] John: Yeah, absolutely. That certainly one of the advantages is at the

end of the day it's an adjustment to your cost base. So every dividend you

receive, or every distribution you receive, your cost base goes down.

[00:22:56] And ultimately when you sell the units down the road, you're gonna

pay the capital gains tax. So, you know, you defer the tax payment on the

distribution. Which can be quite powerful if you're in it for a long time and

allow that money to compound into the future. So ultimately you end up paying

capital gains on your investment, but capital gains is still the best out of

dividend or interest income.

[00:23:15] So very attractive sort of tax future of the product.

[00:23:18] Gavin: Just briefly here, the stock codes or stock tickers for

premium yield and the Canadian bank enhanced yield?

[00:23:25] John: Yeah. So the premium yield is on Fund Serve. There's a Class

A and a Class F. The class F is MCM 103. The Class A is MCM 101. And then

the Mulvihill Canadian Bank Enhanced Yield ETF trades on the TSX under the

ticker CBNK.

[00:23:39] Gavin: The fees on those are, I'm sure, very reasonable?

[00:23:42] John: Yeah. Yeah. So we're currently charging 70 basis points on the

Mulvihill Premium Yield Fund and 65 basis points on the Canadian bank fund.

Very in line, I guess, with what other market managers are in the ETF space.

Particularly in the option arena charging today.

[00:23:56] Gavin: Yeah, cause specialist

[00:23:57] ETS always have higher management fees. So those yields, this 5%

on the premium yield and the 7.7 or thereabouts on CBNK, are after all of these

expenses?

[00:24:06] John: Yes. Yeah. So far today performance and everything has been

calculated, net of fees, net of expenses.

[00:24:10] Gavin: Yeah. You mentioned that you were maybe a little late to the

ETF space but that you had, apart from CBNK, are the ones that you were

looking to introduce. Obviously as a not yet public or prospectus we can't

specifically talk about them, but you'd look to actually be bringing some more

ETFs in the not too distant future?

[00:24:26] John: Yeah, absolutely. We have a number of prospectus already

completed and sitting with the regulators in Ontario and we've had really great

discussions over the last eight months to bring out some pretty innovative

products that don't exist in North America yet. We're quite excited. I think we're

very close to getting approval.

[00:24:42] If we do, I'll come back and tell you all about them. But, you know,

they will follow the same sort of structure that we have for the Canadian bank

one. This idea of a more or less passive underlying exposure, but with the 25%

leverage and the option writing to boost the yield.

[00:24:56] Gavin: Well that would obviously be true to the philosophy of the

firm in terms of bringing strategies that are difficult to access for the average

retail investor, through the medium of whether it's ETFs or mutual funds, or the

like. John, thank you very much.

[00:25:07] That's been extremely informative and hopefully we'll, perhaps, set

to rest some fears about the dangers of option writing and being naked and other

embarrassing things. Thank you very much.

[00:25:16] John: Thank you Gavin. Appreciate the time.

[00:25:23] Gavin: Thank you very much for listening to The Gavin Graham

Show sponsored by SmartBe Investments. If you would like to learn more about

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