“You’re giving up some of the upside in a surging market,” he admits. “But you’re gaining a more reliable cash stream across all kinds of market conditions — rising, falling, or flat.”
The Canadian market is dominated by sectors that tend to operate in concentrated environments — banks, pipelines, insurance, and utilities. “Many of these companies function in oligopolistic markets,” Dragosits says. “There’s limited competition and low pricing pressure.”
These structural characteristics create a more predictable business environment. Revenue streams tend to be steady, even when broader economic growth slows. That makes them well suited to income-focused strategies.
“These are large, mature businesses. They’re not high growth, but they generate stable cash flow and consistent dividends,” he adds. “That’s the kind of profile you want when the focus is on income and downside protection.”
Despite higher bond yields, investor appetite for equity income has not gone away. Covered call strategies like HLIF remain relevant, especially in taxable accounts where the option premiums are treated as capital gains, not interest.