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Not All Covered Call Strategies Are Created Equal

Generate growth and income with the TD Enhanced Dividend ETFs: TD Active Global Enhanced Dividend ETF (TGED), TD Active U.S. Enhanced Dividend ETF (TUED) and TD Active U.S. Enhanced Dividend CAD Hedged ETF (TUEX). Managed by TD Asset Management Inc. (TDAM), one of the largest and most experienced investment managers in Canada. For more information on TD ETFs and ETFs in general visit our TD ETF Resource Centre.

Income or Growth? Choose both with TGED, TUED & TUEX

 
Net Worth

Income

Income is generated through dividends paid from underlying holdings and from option strategies like selling calls and puts.
cash flow

Growth

Unlike some systematic covered call strategies, that pay high distributions yields at the expense of growth, the TD Enhanced Dividend ETFs are thoughtfully designed to focus on total return by actively investing in quality companies and then tactfully employing options to generate income, while maintaining exposure to the growth potential of stocks.

What is an Enhanced Dividend? 

The TD Enhanced Dividend ETFs were designed to resolve the specific challenge of balancing growth and income in the search for yield. The strategy behind addressing this challenge is to generate highly attractive income through a differentiated option overlay strategy. Unlike many competitor products, these ETFs use an active approach in selecting stocks and writing options. Below we illustrate how an enhanced yield or dividend is obtained.
cash flow

Dividend Yield

cash flow

Call Option Yield

cash flow

Put Option Yield

Education Savings

Enhanced Yield

Currency Hedging

Many Canadian investors will get exposure to international investments through a Canadian based exchange-traded fund (ETF) or mutual fund. The fund will typically be priced in CAD while the fund's underlying investments will be priced in other currencies, like the U.S. dollar. This creates potential foreign currency exposure risk—the value of an investment held by a fund will be affected by changes in the value of the currency in which the investment is denominated, relative to the base currency of the fund. TD Active U.S. Enhanced Dividend CAD Hedged ETF (TUEX) invests directly in units of TUED and attempts to minimize the effects of currency swings on the investment portfolio through a currency overlay strategy using derivatives.

Key Facts

 
Tickers
TGED
TGED.U
TUED
TUED.U
TUEX
Name
TD Active Global Enhanced Dividend ETF
TD Active U.S. Enhanced Dividend ETF
TD Active U.S. Enhanced Dividend CAD Hedged ETF
Benchmark
MSCI World Index (C$, Net Dividend)
S&P 500 Index (Net Dividend, Total Return)
S&P 500 CAD Hedged Index (Net Dividend, Total Return)
Management Fee (%)
0.65
0.65
0.65
Risk Rating
Medium
Medium
Medium
Distribution Frequency
Monthly
Monthly
Monthly
Distribution Yield (%) (As of July 31, 2023)
4.2 (TGED)
4.1 (TGED.U)
3.0 (TUED)
3.1 (TUED.U)
TBD

Additional Resources

 

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The information contained herein has been provided by TD Asset Management Inc. and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.

Commissions, management fees and expenses all may be associated with investments in exchange- traded funds (ETFs). Please read the prospectus and summary document(s) before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. Index returns do not represent ETF returns. The indicated rates of return are the historical total returns for the periods including changes in unit value and reinvestment of all distributions and do not take into account redemption, commission charges or income taxes payable by any unitholder that would have reduced returns. Past performance may not be repeated.

TD ETFs are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank

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