BMO CDN HIGH DIV COVERED CALL ETF (ZWC.TO)…

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BMO CDN HIGH DIV COVERED CALL ETF (ZWC.TO)

22.52

+0.08 (0.36%)

as of Jul 7, 2026, 7:59:59 pm Market Open.

216 watching

Investor Insights

Jul 8, 2026, 12:00 am

This summary was created by AI, based on 1 opinions in the last 12 months.

The BMO CDN HIGH DIV COVERED CALL ETF (ZWC) is highlighted as a top choice for investors seeking value and income through covered call strategies. While it capitalizes on high-dividend plays from mature companies, the challenge lies in the comparative volatility levels between value and growth stocks. Experts suggest that although value stocks do not offer the same degree of volatility as growth stocks, ZWC captures essential characteristics for those prioritizing income. The ETF's focus on sectors like banks and telecommunications indicates a value tilt, making it appealing for income-seeking investors. Ultimately, while growth stocks might provide enhanced yields, ZWC's strategy emphasizes stability and consistent returns in a lower-volatility environment.

Consensus

Positive

Valuation

Fair Value

Similar

BNS, BNS

COMMENT

In a TFSA? Basket of high dividend payers. Overlays some options to attract more income. Performed decently YTD, up 1%. If you're bullish on underlying securities, you're better off holding them than the covered call. Covered call works best in flat or declining markets. Already pretty tax efficient. He owns XEI instead. Yield is about 6.6%.

BUY

Good to reduce volatility. A covered call on a dividend payer layers in defence upon defence. ZWC will provide a steady income stream on the way up, yet limited vol on the way down.

Unspecified

Has held shares in the past, but doesn't own any right now. Will leave it to investors to determine if product is right for them.

BUY

Tilted to value, preferable now with rising rates. About 37% financials, 15% energy, 13% communications. 72 bps expense ratio. Likes the strategy. Makes sense for the extra income. Yields about 6.2%.

BUY

A market cap weighted high dividend covered call strategy. It covers the top 50 stocks that are good dividend players in the TSX.

COMMENT

Is the 6.5% dividend too good to be true? Is there a return of capital portion in the yield? He doesn't believe so. On all BMO covered call ETFs you're adding 2-2.5% to the dividend to total 6.5%. No, there are no return on capital issues.

COMMENT

A covered call on the entire Canadian market. He tends to use covered calls on sectors. ZWC will give you an enhanced income stream, but its growth is limited.

COMMENT

ZPAY is his favourite way to play the US market. European ZWE is for Europe and if you need Canadian exposure. ZPAY is designed to yield around 6%. Will have some volatility but will have half of what the S&P will see.

COMMENT

The caller requested suggestions for higher dividend ETF. There's a number of ways to play it. Go to an ETF website to see which ETF fits your profile. Covered calls provide higher dividends.

DON'T BUY

Covered calls give you a boost in the distribution. Not a bad strategy when market is flat or slightly negative. If market continues to go higher, you're better off owning the underlying securities. Consider XEI instead, no covered call. Owns the securities outright, and so you won't get as high a dividend, but you might get more performance. In last 6 months, XEI returned17-18%, whereas ZWC returned 10.68%.

PARTIAL BUY

Compare to ZDB-T. The covered writing ETF including dividends is under-performing the simple buy and hold strategy. During a recovery, the covered written stocks are capped on the upside. You get a slim amount of option premium because the premiums are priced on the volatility of the underlying equity. Don't let your whole portfolio be covered written. Be careful.

COMMENT

ZWC would be his favourite so he can be more defensive. If you are bullish, ZDV would make sense. Markets have some squeeze potential and there is liquidity coming to markets from stimulus. He does not see materially higher highs than where we are up until early next year.

COMMENT

The caller owns the many of the underlying stocks and is considering switching to this ETF. ZWC is a covered call so you will get some enhanced yield. If you seek yield, it could be a better way to go. If you want flexibility, then the individual stocks makes sense. Hard to know the right answer.

HOLD

It has the TSX covered, banks, oils and everything else. You are after it for the yield. Sometimes the managers get overwhelmed and then sell the call further out so they are very good. They are pretty agile. He would not be in a race to sell.

HOLD

They are both high dividend covered call ETFs. They have underperformed compared to tech and growth stocks. If you want good dividend paying stocks, it is a fine investment for buy and hold. They only write the options on half the positions to enhance yield.

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BMO CDN HIGH DIV COVERED CALL ETF (ZWC.TO)