HSBC MSCI Europe Islamic UCITS ETF EUR Acc (HIPS)
LSE 
Summary
HIPS Chart
HIPS: A Deeper Look at the Strategy Behind Its 11% Yield
Investors are increasingly looking beyond traditional stocks and bonds to meet their income goals. One fund drawing attention for its generous yield is the GraniteShares HIPS US High Income ETF (HIPS).
HIPS: Not A Buy And Hold, 10% Yield
The GraniteShares HIPS US High Income ETF (HIPS) tracks the EQM High Income Pass-Through Securities Index, equally weighting 40 holdings across MLPs, BDCs, CEFs, and REITs. HIPS is a volatile, risk-on fund with a 3-year standard deviation of 14.2% and a Sharpe ratio of 0.42, experiencing significant drawdowns. Due to NAV erosion in components like Annaly (NLY), which lost 50% in price over a decade, HIPS is not ideal for long-term holding.
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HSBC MSCI Europe Islamic UCITS ETF EUR Acc Profile
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Overview
The fund operates on a passive management or indexing investment approach with the primary goal to mimic the performance of the HIPS index. This strategy focuses on high income U.S.-listed securities, which are distinctive due to their "pass-through" structures. These structures mandate these entities to distribute almost all their earnings back to the shareholders in the form of cash distributions. This investment approach is carefully crafted to cater to investors looking for steady income streams through dividends, emphasizing high-income, pass-through securities.
Products and Services
The fund's offerings revolve around its core strategy of high income, pass-through (HIPS) investment, detailed as follows:
- HIPS Index Tracking - A specialized investment product designed to replicate the performance of the HIPS index, focusing on high-income, pass-through securities. This product targets investors aiming for income through dividends, leveraging a portfolio of up to 40 U.S.-listed securities that distribute the majority of their earnings.
- Passive Management Investment - The fund employs a passive management or "indexing" strategy, effectively reducing management fees and operational costs. This service is ideal for investors seeking long-term, cost-efficient exposure to the high yield space without the active management price tag.
