Commentary: HBG

Australian Banks Outperformed the Canadian Banks During the Global Financial Crisis

It is well known that the Canadian banks performed very well during the financial crisis relative to their global peers, and the U.S. banks in particular. However, what is less well known is that the Australian banks did even better than the Canadian banks, generating higher returns from 2007 through 2009, the years encompassing the financial crisis (see chart below). As we explain in “Dividend-Heavy Australian…

Dividend-Heavy Australian Financials: History of Outperformance vs. Canadian Peers

All Canadian bank investors know that the sector has experienced very good performance over the past ten to fifteen years. However, most are less familiar with Australia, which actually has a history of long-term outperformance relative to the Canadian financials, with virtually identical volatility. Interestingly, as a testament to the strength of the Australian financial sector, its banks even outperformed the Canadian banks during the global…

U.S. Financials | Analysts vs. the Markets (as Fundamentals/Stock Prices Diverge)

This has been a tough month for the financials, particularly banks. What made this correction unusual is that throughout October, the financials continued to post very high earnings growth, and with minimal downgrades in estimates/target prices, the ingredients for a sharp sell-off were largely absent. Of the 270 financial services stocks covered by the U.S. broker-dealer, Sandler O’Neill + Partners (SOP), over 70% met or beat…

U.S. Financials | Mid-Caps Longer-Term Outperformance in One Chart

Given the media attention given to the U. S. large-cap financials (e.g., JPM, MetLife, AIG), Canadian investors can’t be faulted for sometimes neglecting to diversify into the very large and varied mid-cap financial sector south of the border. That said, in our view, investors should not overlook this important sub-sector given its long-term history of material outperformance relative to its better known large-cap peers, as evidenced…

Notes from Chicago: Opinions on the Canadian Banks (part 1)

We recently met with the top management of four Chicago-headquartered U.S. mid-cap banks (see related October 9, 2018 “Notes from Chicago – Three Takeaways from the Windy City (Part 2)”). Given their large presence in this giant MSA, it was not surprising that the Canadian banks and their speculated U.S. expansion plans were a frequent discussion topic. Chicago is the single most important market to Canadian…

Notes from Chicago: 3 Takeaways from the Windy City (part 2)

We recently met the top management of four U.S. mid-cap banks headquartered in Chicago (see related October 10, 2018 “Notes from Chicago – What the Banks Said About the Canadian Banks/M&A (Part 1)”). Chicago is the third largest U.S. MSAwith real GDP of US$583 billion and a population of 9.6 million. Although large, the Chicago MSA has one of the least favourable demographic profiles among the “large…

HBG/HFY Outperforming Almost Everything (in a Sea of Red)

Despite a very challenging year for global financials/banks, the Hamilton Capital Global Bank ETF (HBG) and Hamilton Capital Global Financials Yield ETF (HFY) are both outperforming their benchmarks, as well as virtually all relevant country indices year-to-date. In fact, with concerns over global trade, emerging market volatility, European politics, and the shape of the yield curve, virtually all relevant global financials and bank indices are down…

HBG: Up ~4% YTD Despite Global Sea of Red

U.S. Bank Portfolio Outgrows U.S. Bank Peers for the 9th Consecutive Quarter Hamilton Capital Global Bank ETF (HBG) continues to enjoy material outperformance with comparatively low drawdowns. Since inception, it has reported a 17% annualized return and is 20.3% ahead of the global bank index (in CAD). Year-to-date, HBG is up 3.9% which compares to a decline in the global bank index of ~2% (in CAD)…

Notes from Texas: Lone Star Shines Bright

On a recent investor roadshow to Texas, we had the opportunity to meet the top management of ten Texas headquartered U.S. banks. The Texas economy is booming (annualized real GDP grew +5.2% yoy in Q4/17 making it the fastest growing economy of all 50 U.S. states) driven by a robust recovery in the energy sector and strong labor market trends in an increasingly diversified economy. With…

Global Exchanges and E-Brokers: favourable secular and cyclical themes

We met the management of over a dozen global exchanges and e-brokers at a recent conference in New York. Global exchanges and e-brokers have benefitted from secular, regulatory and cyclical tailwinds over the past decade, which has resulted in robust earnings growth and driven strong stock outperformance.  The Hamilton Capital Global Financials Yield ETF (HFY) which is outperforming its benchmark by 270 bps since inception and has a…

U.S. Banks: 3 Deals in 3 Weeks. Will M&A Accelerate Post-Dodd-Frank?

Hamilton Capital ETFs continue to benefit from material outperformance and substantial AUM growth. In this note, we discuss U.S. bank M&A and ask the question: will successful passage of the Dodd-Frank rollback bill result in an acceleration of sector consolidation? Last week, on May 24th, the President signed a bipartisan bill rolling back key provisions of the Dodd-Frank Act (named “Economic Growth, Regulatory Relief and Consumer Protection Act”).

Notes from Spain: Improving Backdrop for the Banking Sector

On a recent trip through Madrid, Spain we had the opportunity to speak to most of the publicly traded Spanish banks, as well as the Bank of Spain. The Hamilton Capital Global Bank ETF (HBG) which is outperforming its benchmark by 14.4%, has ~3% exposure to Spanish banks, while the Hamilton Capital Global Financials Yield ETF (HFY), which is outperforming its benchmark by over 6%, has…

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