Summer Sale
50% off Premium Yearly
Opinions John Hood
BMO Dow Jones Indus. Avg. Hedge ETFZWA.TOTOP PICKApr 13, 2015
John HoodStock price when the opinion was issued
As of Jun 15, 2026. Market Open.
You might be interested:
His least favourite BMO ETF, terrible way to get exposure to US equities. Not because it's BMO or because of the structure, but because it's the Dow. DJIA is weighted by the size of a company's stock, so higher prices get more weight than lower. Terrible index.
He'd much prefer an ETF that's in the S&P 500 or an equal-weight US market exposure.
Larry Berman CFA, CMT, CTALikes it. A little more restricted than the ZWH, and the yield is about 1.5% lower than that one. Might be better for growth instead of income.
(A Top Pick May 18/18, Up 5%) Covered call adds yield when the market goes sideways, as it usually does in the summer. You don’t have to time the market, you just participate and take down portfolio risk.
Jon VialouxIncreasing US exposure in the TSX ETF? There are a couple he would look at. BMO Dow Jones Indus. Avg. Hedge (ZWA-T), which is a covered call on the Dow stocks, as well as BMO US High Dividend Covered Call (ZWH-T) which is based on the higher dividend paying S&P. He likes both of these. They are more expensive because they are Covered Calls, but is quite impressed with the value added. He has a lot of these.
John HoodHe likes covered call strategies during the summer. If we are expecting a flat to negative print on the broad market tape, then really you want to be in some of these covered call names. In a higher trending market, you are going to be called away from these positions, which is detrimental to the price of these covered call ETFS. In a flat to negative trending market, you are benefiting from the covered call overlay, which is 2% above the benchmark yield of about 2.7%.
This gives you some actual capital gains income from the US market, instead of always being in terms of income, because the covered calls are treated as capital gain. He likes it because he can be in the US market with a little bit of a hedge on, and he likes the income component of it. Also, BMO doesn’t sell the calls against the index; they sell them against all the stocks in the DOW, which gives you a better bang for the buck. You have to remember that this is a little expensive at around 70-75 basis points.