ETFs FAQ

About Pricing & Liquidity

When buying or selling a stock, its liquidity — the ready availability of both buyers and sellers — is often a concern. It’s important for investors to remember that an  ETF’s true (or “implied”) liquidity is measured by the liquidity of its underlying portfolio, not the trading volume of the ETF itself.

Did you know that market makers provide “on demand” liquidity for ETFs?

The market makers for Hamilton Capital ETFs are National Bank Financial and BMO, which can create/redeem units at their discretion. This ‘service’ is reflected in an ETF’s bid/ask prices, resulting in a modestly higher spread (typically a few cents) vs the ETFs underlying net asset value (NAV). Importantly, the greater liquidity of the underlying portfolio, the tighter the spread of the ETF market price.

Did you know that an ETF’s “true” liquidity is not its daily trading volume but the liquidity of the underlying portfolio?

The global financial services sector has a combined market capitalization of more than US$13 trillion, making it several times larger than that of the entire Canadian equity markets.

Do actively managed ETFs rebalance daily?

No. As the manager of Hamilton Capital ETFs, we can invest subscriptions at our discretion. There is no requirement to invest right away, or to rebalance daily to a specified index. Nonetheless, because of the large size of the global financials universe, we could allocate significant subscriptions without impacting the prices of the underlying portfolio.

Is NAV pricing efficient?

Yes. The substantial liquidity of the underlying portfolio and the global financials universe means there is, over time, no material difference between the NAV and the trading price of the fund, unlike closed end funds.

Hamilton Capital ETFs liquidity

When buying or selling a stock, its liquidity — the ready availability of both buyers and sellers — is often a concern. It’s important for investors to remember that an  ETF’s true — or “implied” — liquidity is measured by the liquidity of its underlying portfolio, not the trading volume of the ETF itself.

  • HBG’s global bank universe has a total market cap of around US$8.5 trillion, with a total daily liquidity of approximately US$30 billion
  • HFY’s global financial services universe has a total market cap of around US$17 trillion, with a total daily liquidity of approximately US$60 billion
  • HFMU.U’s U.S. mid‐cap financial services universe has a total market cap of over US$2.3 trillion, and a total daily liquidity of approximately US$15 billion
  • HFA’s Australian financials universe has a total market cap of US$500 billion, and a total daily liquidity of approximately US$1.4 billion

HBG, HFY and HFMU.U have greater implied liquidity than a Canadian-limited ETF like XFN, despite higher trading volume of the latter.1

Trading Hamilton Capital ETFs

Trading tips
  • Use limit orders instead of market orders
  • Avoid trading in the first and last 10 minutes of market hours when the prices of the underlying securities are volatile
Large orders & In-kind transfers

For orders of more than 25,000 units, please ask your investment advisor to contact our trading department (details below). Alternatively, if you have an account with either of our market makers — National Bank or BMO — they can also help facilitate large orders.

We are also able to accept in-kind transfers of some securities in exchange for shares of Hamilton Capital ETFs, subject to conditions. If you would like to learn more, please have your investment advisor contact our trading department.

You can reach our trading department at (416) 941-9888 or by sending an email to info@hamilton-capital.com.

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