The case for international equities is changing in ways that go beyond diversification
“We saw such incredible demand for both our U.S. and Canadian High Income Shares ETFs,” said James Learmonth, Co-CIO at Harvest ETFs. “It became clear there was need for products that combined growth and high income, but there wasn’t really an international mandate that addressed both.”
The constraint was structural
Generating option income outside North America is considerably more complicated than buying overseas equities. Options markets exist across Europe and Asia, but they operate differently, particularly when it comes to collateral requirements, and liquidity can be far less consistent than managers accustomed to U.S. markets might expect. For a strategy designed to write covered calls month after month, such differences matter.
The workaround is to reach international companies through U.S. listed securities, such as American depositary receipts, which trade in the United States alongside a deep options market. That is the structure underneath HHII.
“We get kind of that dual benefit of the international company investment access, but at the same time, we’ve also got access to a very liquid options market in the United States,” Learmonth said.
Demand was already visible from the two earlier funds, which he described as leaving a gap where international mandates satisfying both requirements should have been.
