Brompton Tech Leaders Income ETF Maintains Momentum with $0.13 Monthly Dividend

The Brompton Tech Leaders Income ETF (TLF) has reaffirmed its position as a steady income generator in the tech sector by declaring its June 2025 distribution of $0.13 USD (equivalent to $0.125 CAD) per unit. This consistent payout underscores the fund’s strategy of combining dividend income with capital appreciation through exposure to global technology leaders.

Dividend Details and Tax Considerations

The June 2025 distribution, payable on July 15, is part of TLF’s monthly payout structure, which has remained stable at $0.125 CAD since early 2025. For U.S. dollar-denominated units (TLF.U), the amount is $0.13 USD. While past distributions included capital gains and return of capital components, the June 2025 payout is fully classified as Return of Capital, reducing investors’ adjusted cost base but deferring tax liability until the fund’s capital gains are realized.

Investors should note that tax treatment for 2025 distributions will be finalized by March 2026 via T3 slips, which may include allocations to capital gains, foreign income, or dividends.

Fund Strategy: Tech Exposure with Covered Calls

TLF’s performance stems from its focus on large-cap global technology firms such as Apple, NVIDIA, Microsoft, and Alphabet, which collectively represent over 35% of its portfolio. The fund employs a covered call strategy, selling call options on its holdings to generate income and dampen volatility. This approach has helped TLF achieve a 6.89% forward dividend yield as of April 2025, while maintaining a 10-year compound annual return of 14.6% (CAD hedged).

Performance: Outperforming Tech Indices in Volatile Markets

The fund’s risk management paid dividends during market swings. For instance:
- In 2022, when tech stocks fell 29.1%, TLF’s hedged CAD units declined only 13.0% since inception (May 2011).
- Over the past three years (2023–2025), TLF delivered a 9.7% annualized return (CAD), outpacing the broader S&P 500 Technology Sector Index’s 5.3%.

Risks and Considerations

• Tech Sector Volatility: TLF’s heavy exposure to AI, cloud computing, and semiconductors makes it sensitive to sector-specific risks, such as regulatory crackdowns or economic downturns.
• Interest Rate Sensitivity: Rising rates could pressure tech valuations, though TLF’s covered calls may mitigate some downside.
• Return of Capital Concerns: While the current distribution structure preserves cash flow, persistent Return of Capital allocations could reduce investors’ tax efficiency over time.

Conclusion: A Balanced Bet on Tech Innovation

The Brompton Tech Leaders Income ETF remains a compelling choice for investors seeking high monthly income paired with exposure to transformative tech companies. Its 6.89% dividend yield, coupled with a 10-year track record of 14.6% annualized growth, positions it as a standout option in an era of volatile markets and low bond yields.

However, investors must weigh the fund’s risks, including reliance on active management and sector concentration. For those willing to accept these trade-offs, TLF’s blend of income and innovation-driven growth offers a robust strategy to navigate the tech sector’s future.

In summary, TLF’s June 2025 dividend reinforces its role as a steady income source, while its performance data and strategy suggest it could continue to reward patient investors in the years ahead.