Hamilton Enhanced U.S. Covered Call ETF (HYLD): When Issuers Listen to Investor Feedback

Back in February 2022, Hamilton ETFs launched the Hamilton Enhanced U.S. Covered Call ETF (HYLD). The pitch was simple enough: give investors access to a 1.25x leveraged portfolio of U.S. covered call ETFs, tracking a custom Solactive index designed to mirror the composition and sector weightings of the S&P 500.

I took a look at HYLD at the time, and I wasn’t impressed. Sure, the 10% target yield was eye-catching, but the structure left a lot to be desired. The ETF was essentially a fund-of-funds holding eight U.S. covered call equity ETFs. That approach introduced two problems.

First, there was the withholding tax drag on U.S. dividends. Unless held inside a Registered Retirement Savings Plan (RRSP), there was no way around it. Second, and more frustrating, was the double layer of fees. Investors weren’t just paying Hamilton’s management fee. They were also footing the bill for the expense ratios of all the underlying ETFs.

Thankfully, Hamilton didn’t dig in. They listened to investor feedback and overhauled the fund. Credit where credit is due: few Canadian ETF issuers are as responsive to retail input. Here’s what changed, and why HYLD looks a lot better now.

A rough start for HYLD

Hamilton began tweaking HYLD well before its first birthday. In October 2022, they announced the fund would add the JPMorgan Equity Premium Income ETF (JEPI) while removing the Harvest Brand Leaders Plus Income ETF (HBF). In other words, they replaced a direct Canadian competitor with an arguably superior U.S.-domiciled ETF.

That swap made sense. JEPI charges a much lower fee of just 0.35% compared to HBF’s 0.92% and in my view, it’s simply a better product. JEPI has delivered strong risk-adjusted returns and is one of the more disciplined covered call ETFs in the U.S. market.

But then Hamilton added a 3% allocation to the CI Energy Giants Covered Call ETF (NXF) while trimming the same amount from the Harvest Healthcare Leaders Income ETF (HHL). On paper, this helped rebalance sector weights to better reflect the S&P 500, but the optics were mixed. After removing a pricey Canadian ETF in favor of a cheaper U.S. one, they circled back and bought another high-fee Canadian product anyway.

In January 2023, another round of changes rolled through. HYLD added the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and dropped the CI Tech Giants Covered Call ETF (TXF). Again, hard to argue with the logic: JEPQ offers a better yield, lower volatility, and a more competitive fee structure.

Then again in April 2023, HYLD underwent yet another shakeup. This time, Hamilton replaced its exposure to Global X’s U.S.-listed covered call ETFs (QYLD, RYLD, and XYLD) with the Canadian-listed equivalents offered by Global X Canada (formerly Horizons ETFs): QQCC and USCC.

The rationale made sense on paper. For Canadian investors, QQCC and USCC offered higher yields net of U.S. withholding taxes. On top of that, these funds didn’t sell ATM covered calls on 100% of their portfolios. Instead, they covered only about half, giving them greater potential for upside capture during rallies. So again, the move itself wasn’t irrational.

But it was yet another shift in an already actively managed fund-of-funds structure. From the outside, HYLD had started to feel more like an ETF strategy in development than a finished product. Investors who had bought in early expecting a set-it-and-forget-it covered call solution instead found themselves in something more dynamic, more expensive, and arguably more complicated than they had bargained for.

So, at that point I found myself asking: what exactly were investors paying Hamilton for here? HYLD was basically actively trading a portfolio of U.S. covered call ETFs, taking a management fee, and still exposing investors to the underlying costs of each ETF in the basket.

I ran the numbers and figured someone could replicate the strategy themselves by converting CAD to USD through Interactive Brokers at low cost, and buying the same U.S. ETFs directly in an RRSP, thereby avoiding both layers of fees and the U.S. withholding tax.

The big overhaul for HYLD

Remember, ETFs are a business, and behind every business is strategy. At some point in late 2023, it became clear that someone high up at Hamilton ETFs saw the same feedback retail investors were voicing on Reddit, Twitter, and elsewhere.

Hamilton listened and made major changes. In January 2024, they dropped HYLD’s management fee to 0%. That eliminated the “fee-on-fee” problem that had plagued the fund’s early structure. Investors were no longer paying Hamilton’s fee on top of the management fees charged by external ETF providers.

Hamilton pulled this off by completely internalizing HYLD’s holdings. Instead of holding third-party covered call ETFs, HYLD was restructured to hold only Hamilton-managed products. Specifically, their own YIELD MAXIMIZER ETFs, which cover most sectors of the S&P 500.

To comply with Canadian securities regulations, Hamilton also made clear that they wouldn’t charge fees at both levels. In plain English, it means HYLD doesn’t pay a management fee if it’s investing in other Hamilton ETFs, and those ETFs aren’t charging overlapping fees for the same service.

The result was more of the yield flowed through to investors. Starting with the February 2024 distribution, HYLD’s monthly payout rose 8% to $0.131 per unit (up from $0.121).

Fast-forward to July 2025, and HYLD is a completely different product than the one that launched in 2022. It now sits just shy of $1 billion in assets under management and offers a yield of 12.83%.

That’s a far cry from the clunky fund-of-funds structure it started with, and a rare case of an ETF issuer actively responding to investor feedback and getting it right.