Related posts
Nervous markets await NvidiaThis summary was created by AI, based on 4 opinions in the last 12 months.
Experts suggest a complex landscape for utility investments, especially between BMO Equal Weight Utilities Index ETF (ZUT) and ZWU. Both funds are sensitive to interest rate movements, and while ZWU offers a covered call overlay for greater income potential, it may underperform if interest rates remain stable or do not decline as expected. ZUT, on the other hand, is viewed as a non-covered call alternative that could outperform in terms of total return over the long term, appealing to investors seeking growth rather than immediate yield. The current economic context, including anticipated interest rate cuts, indicates a favorable outlook for utility stocks, which are characterized by their defensiveness and stable dividends. Additionally, there are optimistic projections regarding the sector's growth driven by advancements like AI and electric vehicles, marking it as an interesting area for investment consideration.
You need to anticipate which direction yields will move, because the market has already priced in interest rate cuts. If rates don't fall, an interest-rates sensitive like ZWU will perform at or underperform your expectations; this has already rallied 10% in the past month. ZWU pays you more income given its covered call overlay vs. ZUT which doesn't give you extra income.
A non-covered call alternative to ZWT. Over the long term, outperforms the covered call on a total return basis. The better growth alternative.
For covered call strategies, always consider the yield and the source of that yield. With ZWT, you'll forego some upside if utilities markets are strong, but you get more yield on an ongoing basis. Best for ongoing yield to pay your bills.
Given the kind of market we're heading into, some strategists feel pretty good about utilities. Utilities are considered defensive, as people need to pay them whether the economy is good or bad; tend to have stable dividends.
If you're interested in the utilities sector, this is a good one to look at. All utilities had a big selloff when rates were rising in 2022 and 2023. Then, as interest rates went nowhere, so did the stocks, just collecting the dividend. BOC has cut twice, Fed is probably going to start. Utilities have come up off lows, but haven't started to move up yet.
There's certainly that potential there for more demand for power generation as we get into AI. It's steady growth, but a mature sector. Catalysts could be AI or EVs really taking off. Influenced quite a bit by swings in interest rates.
Return of 38% over 5 years, whereas ZWU has a total return of only 13%. With covered calls like ZWU, you miss out on upside over time. The underlying securities of a covered call strategy often perform a bit better. So if you don't need the income, start looking at the underlying securities.
Utilities are good for yield seekers. Could look at ZWU with broader based with utilities + other dividend players as well as some US exposure. Overall, good for income.
An ETF for utilities. A great defensive sector with amazing performance lately. XUT-T is good, but 60% is in the top 4 holdings (inculding Fortis and Algonquin); 4% yield and 55 basis point cost. ZUT-T is more diversified and equal-weight. ZWU is also equal weight but does covered calls to create extra income, which sells future income for gains today; yields 6%. Given the strong performance of utilities in the past year, covered calls have lagged.
BMO Equal Weight Utilities Index ETF is a Canadian stock, trading under the symbol ZUT-T on the Toronto Stock Exchange (ZUT-CT). It is usually referred to as TSX:ZUT or ZUT-T
In the last year, 6 stock analysts published opinions about ZUT-T. 2 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for BMO Equal Weight Utilities Index ETF.
BMO Equal Weight Utilities Index ETF was recommended as a Top Pick by on . Read the latest stock experts ratings for BMO Equal Weight Utilities Index ETF.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
6 stock analysts on Stockchase covered BMO Equal Weight Utilities Index ETF In the last year. It is a trending stock that is worth watching.
On 2025-05-02, BMO Equal Weight Utilities Index ETF (ZUT-T) stock closed at a price of $23.08.
You need to anticipate which direction yields will move, because the market has already priced in interest rate cuts. If rates don't fall, an interest-rates sensitive like ZWU will perform at or underperform your expectations; this has already rallied 10% in the past month. ZWU pays you more income given its covered call overlay vs. ZUT which doesn't give you extra income.