Then comes the average recovery index ETF (HCA) of Hamilton Bank in Canada, which tracks the average return index of Canadian fixed bank TR. Each quarter, HCA usually allocates 80% of its portfolio to the three banks that have recently performed poorly, while 20% of its portfolio outperforms the three banks that underperformers can rebound.
These custom strategies can be generated at a higher cost. TBNK charges 0.28% of MER, RBNK earns 0.32% and HCA is high at 0.45%. So far, these additional expenses have not translated into major over-performance. From May 2023 to May 2025, the total return of these ETFs is within 1% of the cumulative, above or below the simple equivalent weighted Zeb.
HCA, TBNK, RBNK and ZEB history cumulative total returns
Use cases: If you want to get weirder about your exposure, these ETFs might be suitable – based on dividend growth, yield or price conversion, which ETFs will the bank outperform and can outperform higher fees (rather than guarantee) for victory (rather than guarantee).
These ETFs are umbrellas of alternative strategies, meaning they go beyond traditional long-term buying methods. They often employ derivatives or leverage, designed to enhance certain aspects of exposure, whether it is yield, price returns or both.
A typical example is the BMO Call Call Canadian Banks ETF (ZWB). It owns all six major banks, reflecting Zeb, but it comes at the level by selling options for its holdings. This is upside, but increases income, generating returns composed of dividend income, capital gains and return on capital.
BMO sells these calls through currency and at its discretion, meaning that not every position is always covered, and the portfolio’s potential has increased slightly compared to the system’s call writing strategy. You can get a stable distribution yield of 6.66%, but the price is even more shocking.
Hamilton-enhanced Bank of Canada ETF (HCAL) can be used in another approach. It does not use options at all. Instead, it applies to 1.25 (125%) leverage of the Bank of Canada index, such as Solactive, while Zeb, Heb and HBNK use the same leverage ratio.
Unlike typical leveraged ETFs that are reset through swaps every day, HCAL borrows money using cash margin, which means its returns are not distorted by daily complexity. This setting amplifies the upside and downside aspects and also increases the yield to 6.42% as the distribution is paid for on larger nominal exposures.
