BMO Covered Call Canadian Banks ETF (ZWB.TO)…

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BMO Covered Call Canadian Banks ETF (ZWB.TO)

30.87

+0.16 (0.52%)

as of Jul 3, 2026, 7:58:42 pm Market Open.

328 watching

Investor Insights

Jul 5, 2026, 12:00 am

This summary was created by AI, based on 8 opinions in the last 12 months.

The BMO Covered Call Canadian Banks ETF (ZWB) has garnered mixed reviews from experts, with some praising its covered call strategy and yield, while others express caution regarding its concentration in the Canadian banking sector and current economic conditions. The ETF has performed well, up approximately 52% over the last year, but is noted to be underperforming relative to the equal-weighted ZEB ETF, which has seen a 63% gain. Experts highlight the defensive nature of the covered call overlay, though it comes with trade-offs in terms of upside potential. They advise against adding new capital at this juncture due to concerns over a potential economic downturn that could impact Canadian banks significantly, suggesting a cautious long-term outlook while emphasizing the importance of diversification with both covered and non-covered call strategies.

Consensus

Cautious

Valuation

Fair Value

Similar

ZEB-T

TOP PICK

A core holding that he has recommended before. Canadian banks are strong. The option premiums here are good.

WEAK BUY

Banks are merely okay, but pay good yields. Covered calls work in sideways/down markets and pay extra yield. Not for bullish markets.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O’Reilly An ETF of Canadian banks with dividends enhanced by the use of writing covered calls managed by BMO. Canadian banks are a safe haven during periods of market volatility. This gives some additional premium to holding the banks. We recommend setting a stop loss at $16.00, looking to achieve 14%. Yield 7%

WAIT

Covered calls can help volatility a bit and enhance yield. However Canadian banks are under pressure because of very high consumer debt, especially mortgage debt. Technically if you were to buy it use a stop loss at $17.75 which is not much lower than where it is now. Wait for something to resolve in the market.

BUY

Decent product, and not such a bad idea at this time. If you expect the banks to go up a lot, just buy the banks or an ETF without the covered call. Banks tend to show seasonal strength in mid-October. This is a safer way to play the banks, as they're facing headwinds, but will do OK.

Unspecified

This is a covered call writing ETF with a three year return of 36% and 0.8% MER. Covered call writing sometimes gives up upside. Could try ZEB where calls are not written for about 51% of the holdings. Or you might consider CIC - CI Canadian Banks Income Class ETF. It holds 75% of the basket without the call writing on it. Same yield as ZEB.

TOP PICK

Core holding, especially for more conservative investors who want yield. Banks have been beaten up because of concern about recession, but this is premature. Canadian banks are in pretty good shape from a credit point of view. Yield around 6%.

BUY

Likes it, owns a lot. Yields are more attractive than on regular banks.

BUY ON WEAKNESS

They only write the covered calls on half the position, so you get more upside exposure than pure covered calls. For a more conservative play, ZWB has a covered call strategy on banks. Nothing is risk free however. Does not think there will be a big recession.

HOLD

Domestically, he doesn't generally use ETFs, saving those for foreign exposure instead. Overall, banks are good to be in right now, given world uncertainties. Rules being relaxed means share buybacks and dividend increases. Earnings potential over the next year will stall out, until the economy gets more settled. Prime area to hold for safety.

COMMENT

Question on underlying dividend increase. ZEB yields will rise with dividend increases from the underlying stocks. For ZWB, the dividend increase will increase yield, but much of the performance comes from the volatility and the premium.

DON'T BUY

ZWB vs. ZEB He prefers ZEB, with a lower management fee. ZWB has a higher yield at 5%, instead of 3.1%. ZEB has outperformed the covered call strategy. You want to own the underlying securities without being called out. Covered call strategy works better in a sideways or downwards market. But if the the market's falling, you probably don't want to own either.

BUY

An ETF for a TFSA ZWB, a covered call on Canadian banks, yields 5.5%, and is a surrogate for the Canadian economy.

WAIT

If the Trudeau government wins, then they will impose a surtax. He would wait here since it is not priced in probably. There is also volatility from Chinese real estate and US debt ceiling. Gotta love Canadian banks long term. Could get a better deal.

DON'T BUY

An income based strategy. Would rather own the banks directly rather than the covered call overlay. Probably not getting much from it since you give up some on the upside.

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BMO Covered Call Canadian Banks ETF (ZWB.TO)