The Anatomy of Outperformance: The ECHI Story, Year 1

That is the headline. The more interesting story is underneath it: ECHI's return did not depend on one stock, one sector or one market theme. Leadership kept changing, and the portfolio changed with it.

A strong year from multiple sources

ECHI launched with a concentrated portfolio of Canadian companies held through Ninepoint's individual HighShares ETFs. Cameco, Shopify and Barrick together represented roughly 41% of the fund at launch, and they mattered early: through the end of 2025, the three produced roughly 13 percentage points of the portfolio's first 20 points of return. Barrick gained 33.6% in the fourth quarter alone.

That leadership did not last.

First gold and growth. Then energy. Then the banks.

In the first quarter of 2026, energy took over. Canadian Natural Resources gained 40.3% and contributed approximately 4.3 percentage points; Suncor gained 50.7% and added 4.1 more. With Enbridge and Cameco, the energy group contributed approximately 13.2 percentage points. Meanwhile, Shopify fell 28.7%, subtracting roughly 3.9 points, and Barrick detracted 1.1. ECHI still returned approximately 9.5% for the quarter.

Leadership changed again in the second quarter. TD gained 34.7% and Royal Bank 33.5%, together contributing approximately 7.6 percentage points, with Canadian National Railway adding 1.6, while most of the energy and gold holdings declined. By July and August the pendulum swung once more: Shopify returned to the top of the contributor list, followed by Canadian Natural Resources, Suncor, Barrick and Kinross.

Across five distinct periods, no sector led twice in succession, and every major leader eventually had a stretch when it detracted. That is diversification doing what it is supposed to do. The portfolio spanned banks, energy, pipelines, uranium, gold, railways and technology; those businesses did not move together, and that mattered more as leadership rotated.

The portfolio changed too

ECHI is not a static basket. The clearest example is the banks. TD and Royal Bank were approximately 15.9% of the portfolio at launch, 21.8% by March 31 and roughly 27.6% by June 30. Much of the initial increase came while bank shares were declining: the portfolio was adding exposure, not simply riding appreciation. At launch weights, the banks' second-quarter returns would have contributed approximately 5.4 percentage points rather than the 7.6 they did.

Taking profits mattered as well. Cameco began at approximately 15% and was reduced to roughly 8.4%, largely during and after strong performance. Barrick, the strongest original holding, returning approximately 70.7% since inception, was trimmed as it appreciated. That had a cost: ECHI participated less fully in the summer gold rally. But the objective is not to call the exact top; it is to manage concentration and keep reassessing where capital is best deployed.

Not every decision works immediately. Shopify's weight fell from approximately 15% to 9.9%, mostly because the stock fell rather than through selling ahead of the decline. The position was held through the drawdown, rebounded 26.4% in the summer and became ECHI's largest contributor. Newer additions, Constellation Software, Kinross and Celestica, produced mixed early results, but all began at small weights, limiting the damage if a thesis takes longer to develop or proves wrong.

What about the covered calls?

ECHI primarily owns Ninepoint's individual HighShares ETFs, each combining three elements: equity ownership, covered calls written on part of each position, and measured leverage. Writing calls generates premium that supports distributions; in exchange, some upside is surrendered on the overwritten portion. Leverage can magnify both gains and losses. Importantly, the 44.18%* return is after those trade-offs. The attribution does not separate stocks, premiums and leverage, so no specific portion of the return should be assigned to each.

Did the changes matter?

We tested that question using holding-level returns. A hypothetical portfolio that bought the launch holdings and never traded would have returned approximately 37.7%. One reset to launch weights each attribution period would have returned approximately 42.4%. These are illustrative, not actual results, but they suggest that letting the portfolio evolve, and keeping 2025's winners from compounding into ever-larger weights, added value.

The bigger lesson from year one

Seven of ECHI's ten original holdings gained more than 30%. That was an unusually favourable environment, and a 44% year should not be expected to repeat. Market leadership will change again, covered calls will behave differently in different volatility environments, and distributions are not guaranteed. What year one demonstrates is how ECHI is intended to operate: don't depend on one stock or one sector, don't let yesterday's winners automatically become tomorrow's biggest positions, and keep looking for the next source of return.

The 44.18%* return is the headline. The changing sources behind it are the story.

*Data note: All returns and fund details are a) based on ETF units; b) net of fees; c) annualized if period is greater than one year; d) as at 8/31/2026. Attribution and illustrative portfolio calculations may differ from published NAV performance because of methodology; contributions and counterfactuals are approximate and for explanatory purposes only. Holding-level returns represent the applicable underlying HighShares ETFs. Past performance is not indicative of future results. Distributions are not guaranteed and may change. Covered-call strategies can limit participation in rising markets; leverage can magnify both gains and losses.

The Fund is generally exposed to the following risks: Absence of an active market for ETF Shares risk; Borrowing risk; Collateral risk; Cybersecurity risk; Derivatives risk; Equity investment risk; Exchange risk; Fund of funds investment risk; Halted trading of ETF Shares risk; Inflation risk; Interest rate risk; Leverage risk; Market risk; Mutual fund corporation risk; Regulatory risk; Specific issuer risk; Tax risk; Trading price of ETF Shares risk.

The ETFs do not have a fixed distribution amount. The amount of monthly distributions may fluctuate monthly, quarterly or annually, as applicable, and there can be no assurance that the ETFs will make any distribution in any particular period or periods. The amount of ordinary cash distributions, if any, will be based on the Manager’s assessment of the prevailing market conditions. The amount of distributions may vary if there are changes in any of the factors that affect the net cash flow on the portfolio of an ETF, including the amount of leverage employed by the ETFs. The amount and date of any ordinary cash distributions of the ETFs will be announced in advance by issuance of a press release. Subject to compliance with the investment objectives of the ETFs, the Manager may, in its complete discretion, change the frequency of these distributions and any such change will be announced by press release. Each ETF intends to pay monthly distributions based on its ability to generate monthly cash flows from writing covered call options and any dividends received on the Portfolio Securities held in such ETF’s portfolio, as applicable. The Manager will review the level of distributions for each ETF on a quarterly basis to consider the sustainability of such distributions.

Ninepoint Partners LP is the investment manager to the Ninepoint HighShares ETFs (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.