Stockchase Opinions

Larry Berman CFA, CMT, CTA BMO US Put Write ETF ZPW-T BUY Feb 03, 2025

Is a put-write strategy. They sell puts to generate income on the market. Technical/chart analysis does not work, because most of the return comes from income. This ETF is meeting its goal, despite the down-up chart of recent years. There is also PUTW in the US worth looking at.

$16.685

Stock price when the opinion was issued

E.T.F.'s
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.

You might be interested:

BUY
This writes puts on these stocks a little below and market and generates a yield. It's very defensive, but risky, but better than holding cash. It's exposed to the US dollar. ZPW will give you decent yield.
COMMENT
ZPH-T vs. ZPW-T. When the view is that the CAD$ is going to get weaker you don’t want to be hedged. If it is going to be stronger, then you want currency hedged.
COMMENT
He was a big fan of these put-write strategies--to write puts on the best companies on the market--when they launched, but they have since failed to execute this plan. He still holds these for the yields, though, because it provides an alternative source of yield. In a recession, it depends on how fast the markets go down. There is an embedded protection in these ETFs, giving you only half the downside. With these, you place a put, but don't own the companies, but rather harvest the yield off the option premium.
DON'T BUY
Pays a 7% yield. They take a basket of US stocks, then look at options premiums and carving off a bit of the upside and downside. He doesn't like engineered products like this. ZPW can be depleting asset base, losing some capital in the coming months.
DON'T BUY
Similar to a covered call, but it's the flipside. So it's the sell side. Most people don't understand how puts work, and with the put write you're getting a very complicated strategy. He'd recommend something more conservative, such as covered calls because they're a lot easier to understand.
SELL
He has not been happy with it for a year. They created ZPAY-T which he moved to. It is a similar ETF.
COMMENT

ZPH and ZPW way to extract yield from the market without taking a lot of risk. They have been okay but not great. ZPAY is a better way to benefit from the same strategy.

COMMENT

They write puts and buys good companies at lower prices and sells high. He would cycle out of ZPH and ZPW to ZPAY which generates a rate of around 6% but with a better strategy.

COMMENT
Writes puts on US stocks. Take a look at this one.