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Brompton Funds is an independent investment manager focusing on delivering high-quality regular distributions. In this ETF Issuer article, we delve into Brompton Funds’ existing ETF offerings, shedding light on their unique investment process. We also outline the benefits that investors can reap from these solutions, underscoring the value proposition that sets them apart.

Brompton Funds’ history and purpose

Brompton was founded in 2000 by Peter Braaten, Raymond Pether, and Mark Caranci to provide innovative, income-oriented, alternative investment solutions for individual investors in Canada. In 2005, Chris Hoffmann joined as a partner after 20 years as a corporate lawyer and investment executive. Ray, Chris, and Mark are actively involved in the business, and Peter served as Chairman until his passing in 2014.

Brompton has provided unique, well-conceived alternative investments focused on delivering a high level of regular distributions for over twenty years. Their investment solutions are designed to address investors’ cash flow requirements in all interest rate environments and provide value-added diversification strategies.

Brompton Funds ETFs

The firm’s equity ETF offerings provide growth potential through exposure to actively managed portfolios of global equities and/or of equities of specific high-growth industries. Their equity ETFs employ active covered call strategies to increase portfolio income and lower portfolio volatility. Furthermore, their fixed-income strategies are actively managed and focus on alternative fixed-income asset classes with proven track records that are not easily available in Canada.

Presently, Brompton Funds ETF solutions and their respective investment objectives are detailed below:

Equity Mandates

Brompton Global Dividend Growth ETF (Ticker: BDIV)

This ETF provides monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large-cap global dividend growth companies selected by Brompton, complemented by a proprietary covered call program.

 The portfolio management team uses a top-down analysis to identify attractive sectors. Rigorous fundamental analysis focuses the portfolio on global Dividend Growth Companies with a market capitalization of at least $10 billion that have a history (or in the Manager’s view a future likelihood) of dividend growth. The portfolio management team then actively set the level of covered call writing, with the goal of optimizing distributable cash and total returns.

Brompton North American Financial Dividend ETF (Tickers: BFIN/BFIN.U)

This ETF provides monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large-cap North American financial services companies selected by Brompton, complemented by a proprietary covered call program.

The portfolio management team first uses a top-down analysis to identify attractive sub-sectors. Rigorous fundamental analysis focuses the portfolio on North American Financial Services Companies with a market capitalization of at least $5 billion. The portfolio manager then actively set the level of covered call writing, with the goal of optimizing distributable cash and total returns.

Brompton North American Low Volatility Dividend ETF (Ticker: BLOV)

This ETF provides stable monthly cash distributions, and the opportunity for capital appreciation and low overall volatility of portfolio returns by investing in a portfolio of North American large capitalization equity securities selected by Brompton, complemented by a proprietary covered call options program to enhance monthly income.

BLOV focuses on lowering total portfolio volatility through investing in a diversified blend of equities from North American issuers with a minimum market cap of $5 billion. The portfolio management team employs quantitative analysis with an active fundamental overlay to construct a portfolio with lower overall volatility than the market. The team also overlays an options strategy with the goal of further lowering volatility while increasing distributable cash and total returns.

Brompton Enhanced Multi-Asset Income ETF (Ticker: BMAX)

This ETF is designed to provide attractive monthly distributions and the opportunity for capital appreciation by investing in a portfolio of Brompton ETFs and preferred shares.

By combining multiple investment strategies diversified by geography, sector, and asset class, this exchange-traded fund provides simple, low-cost access to an actively managed portfolio built for various market conditions.

Brompton Sustainable Real Assets Dividend ETF (Ticker: BREA)

This ETF provides high monthly distributions and the opportunity for capital appreciation by investing in an actively managed portfolio of Global Real Assets companies (primarily real estate, utilities, infrastructure, resources), complemented by a proprietary covered call options program to enhance monthly income.

The portfolio management team first uses a top-down analysis to identify attractive sub-sectors. Rigorous fundamental analysis, including the integration of ESG factors, focuses the portfolio on well-positioned, large-capitalization Real Assets issuers. The portfolio management team then actively set the level of covered call writing, with the goal of optimizing distributable cash and total returns and reducing portfolio volatility.

Brompton European Dividend Growth ETF (Ticker: EDGF)

This ETF provides high monthly distributions and the opportunity for capital appreciation through an investment in an actively managed portfolio of large-cap European dividend growth companies selected by Brompton, complemented by a proprietary covered call options program.

 The portfolio management team first uses top-down analysis to identify attractive sectors. Rigorous fundamental analysis focuses the portfolio on large capitalization European equities that have a history (or in the managers view, a future likelihood) of dividend growth. The portfolio management team then set the level of covered call writing, with the goal of optimizing distributable cash and total returns while reducing portfolio volatility.

Brompton Global Healthcare Income & Growth ETF (Ticker: HIG/HIG.U)

This ETF provides monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large-cap global Healthcare companies selected by Brompton, complemented by a proprietary covered call program.

The portfolio management team first uses a top-down analysis to identify attractive sub-sectors. Rigorous fundamental analysis focuses the portfolio on global Healthcare companies which offer a combination of growth and value characteristics. The portfolio management team then actively set the level of covered call writing, with the goal of optimizing distributable cash and total returns.

Brompton Canadian Cash Flow Kings ETF (Ticker: KNGC)

This ETF seeks to replicate the performance of the Brompton Index One Canadian Cash Flow Kings Index (“Canadian Index”). The Canadian Index uses a rules-based methodology to gain exposure to shares of Canadian publicly-listed companies with the highest Free Cash Flow Yields.

Brompton U.S. Cash Flow Kings ETF (Ticker: KNGU)

This ETF seeks to replicate the performance of the Brompton Index One U.S. Cash Flow Kings Index (“U.S. Index”). The U.S. Index uses a rules-based methodology to gain exposure to shares of U.S. publicly-listed companies with the highest Free Cash Flow Yields.

Brompton International Cash Flow Kings ETF (Ticker: KNGX)

This ETF will seek to replicate the performance of the Brompton Index One International Cash Flow Kings Index (“International Index”). The International Index uses a rules-based methodology to gain exposure to shares of companies listed on International Developed Markets (as defined in the prospectus) with the highest Free Cash Flow Yields.

Brompton Tech Leaders Income ETF (Ticker: TLF/TLF.U)

This ETF provides high monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large-cap global Technology companies selected by Brompton, complemented by a proprietary covered call program.

The portfolio management first uses top-down analysis to identify attractive sub-sectors. Rigorous fundamental analysis focuses the portfolio on global Technology companies which offer a combination of growth and value characteristics. The PMs then actively set the level of covered call writing, with the goal of optimizing distributable cash and total returns.

Fixed Income Mandates

Brompton Flaherty & Crumrine Enhanced Investment Grade Preferred ETF (Ticker: BEPR/ BEPR.U)

This ETF seeks to provide: (i) stable monthly cash distributions; and (ii) a stable net asset value. The ETF invests in an actively managed portfolio consisting primarily of U.S. dollar denominated corporate preferred securities, trust preferred securities and other corporate debt. At least 75% of the ETF’s portfolio (at the time of investment) consists of securities that are rated investment grade. The ETF employs leverage to enhance distributable income and total return potential. Low borrowing costs and attractive current yields on US preferred securities allows the ETF to offer a high level of income relative to traditional fixed income investments.

The Sub-Advisor, Flaherty & Crumrine, is the longest tenured U.S. investment firm focusing exclusively on managing portfolios of preferred securities for institutional investors. The Sub-Advisor selects preferred investments for the portfolio, giving consideration to the opportunity for income, issuer and security diversification, credit quality and duration/interest rate sensitivity.

Brompton Flaherty & Crumrine Investment Grade Preferred ETF (Ticker: BPRF/BPRF.U)

This actively managed ETF seeks to provide: (i) stable monthly cash distributions; and (ii) a stable net asset value. The ETF actively invests in a portfolio consisting primarily of U.S. dollar denominated corporate preferred securities, trust preferred securities and other corporate debt. At least 75% of the ETF’s portfolio (at the time of investment) consists of securities that are rated investment grade. The Sub-Advisor, Flaherty & Crumrine, is the longest tenured U.S. investment firm focusing exclusively on managing portfolios of preferred securities for institutional investors.

The Sub-Advisor will select a portfolio of preferred investments for the ETF, giving consideration to the opportunity for income, issuer and security diversification, credit quality and duration/interest rate sensitivity.

Brompton Split Corp. Preferred Share ETF (Ticker: SPLT)

This ETF is designed to provide monthly distributions and the opportunity for capital preservation by investing in an actively managed portfolio of split corp. preferred shares offered by Canadian split share corporations listed on a Canadian exchange.

Conclusion

For investors seeking income-oriented solutions, the offerings of Brompton Funds are worthy of consideration. Given the specific investment strategy focus of each mandate, they can be complementary holdings within a balanced portfolio.

Furthermore, given the active nature of these mandates, investors benefit from the ongoing tactical changes implemented by the manager, resulting in either increasing returns, reducing risk or sometimes doing both.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.