Stable Dividends in a Volatile World: Why SWIN ETF is a Top Pick for Income Investors

In a market where volatility is the new normal, investors crave consistency—especially in dividend payouts. The HAMILTON CHAMPIONS™ Enhanced U.S. Dividend ETF (SWIN) offers precisely that, delivering a steady CAD $0.03 monthly dividend since its February 2025 launch. But SWIN's appeal goes deeper: its sector diversification and strategic leverage set it apart from peers like the HYLD ETF. Let's dissect why this ETF is primed to thrive in uncertain times.

The Case for Monthly Dividend Reliability

SWIN's dividend history, though brief, is flawless. Every month since its inception—February, March, and April 2025—the ETF has paid out $0.03 per unit, with no cuts or delays. This consistency is critical for income-focused investors, especially when compared to volatile tech stocks or leveraged funds that slash distributions during downturns.

The ETF's monthly payout schedule also offers flexibility. Investors can choose to reinvest via DRIP or take cash, aligning with diverse financial goals. While SWIN's yield may seem modest at first glance, its risk-adjusted stability is unmatched. Unlike some high-yield ETFs that prioritize short-term gains over long-term sustainability, SWIN's track record—though young—builds trust in its ability to navigate market turbulence.

Sector Diversification: Avoiding Tech Overexposure

SWIN's portfolio is a masterclass in balance. Unlike the S&P 500, which allocates over 30% to tech, SWIN's Solactive index focuses on sectors with proven dividend growth:
- Consumer Staples (22.1%): Essential goods shielded from recessions.
- Industrials (18.9%): Infrastructure and logistics—critical in any economy.
- Healthcare (11.6%): Steady demand for medical services and pharmaceuticals.

The index deliberately limits exposure to volatile sectors like technology (6.3%) and real estate (3.0%), reducing SWIN's sensitivity to speculative market swings. This allocation is equal-weighted, ensuring no single sector dominates performance—a stark contrast to cap-weighted ETFs that overindex on high-flying tech giants.

Leverage Strategy: Amplifying Returns Without Overexposure

SWIN's 25% leverage (1.25x exposure to its benchmark) is its secret weapon. This modest multiplier boosts returns on the Solactive index's performance while avoiding the reckless borrowing seen in some leveraged ETFs. For context, the HYLD ETF uses a similar 25% leverage but achieves it through cash borrowing, which introduces different risks.

SWIN's approach is index-based, meaning its leverage is tied to the Solactive U.S. Dividend Elite Champions Index's performance—not derivatives or short-term loans. This structure ensures transparency and alignment with the index's long-term dividend growth strategy. While leverage amplifies volatility, SWIN's focus on stable sectors and a proven dividend-paying universe mitigates downside risk compared to HYLD, which relies on covered call strategies that can underperform in rising markets.

SWIN vs. HYLD: A Tale of Two Leverage Models

While both ETFs employ 25% leverage, their execution differs fundamentally:
| Factor | SWIN | HYLD |
|----------------------------|-------------------------------------------|-------------------------------------------|
| Leverage Source | Index-based multiplier | Cash borrowing from financial institutions|
| Risk Profile | "Medium to High" (ETF prospectus) | "Medium" (HYLD's stated risk) |
| Sector Focus | Dividend champions across staples, industrials | Broad S&P 500 exposure via covered calls |
| Yield Consistency | Steady $0.03/month since launch | Variable distributions, up to 13.8% annualized |

SWIN's monthly $0.03 dividend is a clear advantage. HYLD's higher yield claims (13.8%) are misleading—it excludes year-end distributions and assumes constant payouts, which history shows are volatile. SWIN's fixed monthly disbursements offer predictability, a rare commodity in today's markets.

Why Invest in SWIN Now?

1. Market Volatility Hedge: SWIN's low-tech, dividend-focused sectors are less prone to tech-driven crashes.
2. Leverage Done Right: The 25% multiplier amplifies gains without overextending into risky derivatives.
3. Cash Flow Certainty: No guessing when or how much you'll receive—$0.03/month, rain or shine.
4. Outperformance Potential: The Solactive index has historically outlasted downturns, with shorter recovery times than the S&P 500.

Final Call: Act Before the Rally

SWIN is a rare breed: an ETF that combines monthly stability, sector balance, and measured leverage. With dividends already proven and a risk-aware design, it's positioned to capitalize on the current market's love-hate relationship with volatility.

For income investors, this is a no-brainer. Secure your position in SWIN today—before its consistent payouts and strategic diversification attract a flood of capital. The ETF's CAD-hedged structure also shields Canadian investors from currency swings, making it a must-own in any defensive portfolio.

The question isn't whether to act—it's why you'd wait.

Past performance does not guarantee future results. Always consult a financial advisor before making investment decisions.