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)…
Insights & Commentary
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…
HFMU.U Posts 41% EPS Growth Y/Y
In Q1-2018, the holdings in the Hamilton Capital U.S. Mid-Cap Financials ETF (USD) [HFMU.U] have recorded year-over-year portfolio-weighted EPS growth of a robust 41%, which is well ahead of the 35% EPS growth reported by the U.S. large-cap financials. Last quarter – Q4-2017 – HFMU.U’s holdings outgrew the large-caps by 10% (i.e., 18% for HFMU.U versus 8% for the large-cap index). Perhaps more meaningful, excluding the…
HBG’s U.S. Bank Portfolio Posts 39% EPS Growth Y/Y
Hamilton Capital Global Bank ETF (HBG) continues to enjoy material outperformance with comparatively low drawdowns. Since inception, it has reported a 19% annualized return and is 14.4% ahead of the global bank index (in CAD, as of April 30, 2018). One of the main contributors to the strong performance of HBG is the earnings growth of the U.S. bank portfolio. In Q1-18, this portfolio reported yet another…
Canadian Western Bank as a U.S. Mid-Cap Proxy
Canadian Western Bank has achieved highly material long-term outperformance versus its larger peers. In this post, we relate its sizeable outperformance to our preference for U.S. mid-cap banks. In our January 24, 2018 comment, “U.S. Banks: High/Low Growth Areas in One Map (i.e., ‘Follow the Sun’)”, we explained that there are vast demographic differences within the six distinct geographic regions of the United States (five of…
U.S. Banks: Mega-Caps’ Q4 Results in 4 Charts
With reporting season now over, we thought we would offer some key takeaways for the four U.S. mega-cap banks (JPM, C, BAC, WFC). Given that these four firms account for over 33% of the U.S. financials index (S5FINL Index), they have a significant/disproportionate impact on the overall sector’s results and are therefore worth following. In this note, we show operating earnings trends for each bank. As…
HFMU.U Posts 18% EPS Growth Y/Y
With 96% of the fund having reported Q4-2017, the holdings in Hamilton Capital U.S. Mid-Cap Financials ETF (USD) (HFMU.U) have recorded year-over-year portfolio weighted EPS growth of over 18%, which is more than double the 7.6% growth reported by the U.S. large-cap Financials (100% reported). Last quarter – Q3-2017 – HFMU.U’s holdings outgrew the large-caps by 11% (i.e., 12% for HFMU.U versus 1% for the large-cap…
HBG’s U.S. Banks Portfolio Posts 19% EPS Growth Y/Y
February 26, 2018 by Hamilton Capital Hamilton Capital Global Bank ETF (HBG), continues to enjoy material outperformance with comparatively low drawdowns. Since inception, it has reported a 21% annualized return and is 10% ahead of the global banks index (in CAD). HBG also had comparatively low drawdowns during the two large macro corrections and outperformed in 19 of the 20 worst days (see exhibit below). One…
U.S. Banks: Wells Fargo and “Invisible” Bank Taxes
We have written several times on WFC’s inability to grow EPS and its ongoing regulatory problems. That said, even we were surprised that on Janet Yellen’s last day as Chair of the Federal Reserve (“Fed”), the central bank filed a consent order against Wells Fargo (“WFC”) requiring the bank take a number of extraordinary steps to improve corporate governance. While WFC does so, the Fed has…