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

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

22.58

-0.18 (0.79%)

as of Sep 10, 2026, 7:55:06 pm Market Open.

216 watching

Investor Insights

Sep 10, 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 praised for its position as a leading value ETF that incorporates covered call strategies to generate income. Experts note that while high-dividend stocks often showcase value characteristics, they tend to be associated with more mature companies such as banks and telecommunications. The challenge highlighted is the inherent volatility associated with value stocks, which is typically lower than that found in growth stocks. This means that investors might have a trade-off between yield and volatility, as growth stocks offer enhanced yield but with higher volatility. Overall, ZWC appears to be a suitable choice for those seeking a blend of income and value-oriented investments, yet it may not capture the same volatility levels seen in growth-oriented funds.

Consensus

Positive

Valuation

Fair Value

Similar

BNS,

WEAK BUY

ZWC vs. ZWB He'd stay away from financial services, as with the low rates it's hard for the banks to be profitable. He'd rather go with the broader index. The more volatile a price, the higher the premium you'll get on a covered call. The covered call strategy here hasn't delivered in this volatile environment.

WAIT

He uses ZWC to be defensive when he's close to the high point to have more buffer for when the markets go sideways or down. From a low point, you want ZDV to get dividends without covered call. He would wait for a pullback before putting new money in.

COMMENT

When you have written away the upside to get the higher yield, you give away some of the upside as in ZWC-T. If the market will be sideways then this a good holding.

BUY

If you want to stay in the market, which he recommends, this should give you a better experience over all.

COMMENT

ZWC vs. ZWB Both offer additional income through covered calls. ZWC yields 8.4% plus the dividend and premium from the covered call strategy. ZWB (Canadian banks) pays 6.5%. Both you pay 72 basis points in MER. ZWC is more diverse with banks, pipelines and telecoms so he prefers ZWC. Warning: long-term, covered calls can lag the underlying securities if there's a bull market in those securities. In an up market, he prefers the stocks themselves or other ETFs.

HOLD

He has held this before, but sold it when the market began to decline. A covered call is good in a flat or rising market, but in a down market it can impede future recovery. The fund usually only has about 50% of its holdings with covered calls and its yield is about 8%. He thinks it is worth holding.

COMMENT

A good, plain-vanilla product. The covered call is a good defensive strategy; whatever happens at least you get the covered call income. This is perfectly fine. But right now he's worried about the global market--which territory will go down the most in a bear market? He feels we're in the 9th inning of the cycle and expects a bear market sometime. Even a good product like this will lose money if the market turns.

BUY

Very good yield of around 6%. You give up some of the upside with the covered call. Holds some in his more conservative accounts. Remember the management fees are quite high with these covered calls.

BUY

It's an income product, so don't worry about the stock price. The covered calls add a bit more distributions to the dividend. Is it enough for you? This is a bond proxy, really.

COMMENT

ZWC-T & ZWU-T. He loves ZWU-T as a defensive holding. ZWC-T is a broad TSX with a covered call overlay to enhance yields. Canada should underperform the world for a long time as a quarter of the index is the banks. The best two growth areas in the world for a couple of decades are healthcare and technology. These two ETFs would overweight Canada if they were your whole portfolio. ZWE-T and ZWS-T are preferable to include in a portfolio.

COMMENT

Broad exposure to the best dividend payers in Canada. It is a great sector but he thinks we are going into a global slowdown. The resistance level is problem well below the January lows. $16 is probably the bottom. ZWU-T would probably perform a little bit better.

PARTIAL BUY

A popular ETF that gives the double-whammy of Canadian dividend stocks and writes call options on them. It's tax-efficient in a non-dividend account. It pays over a 6% yield. But this charges 72 basis points and has a covered call overlay, so you won't participate as much in a market move upwards. So, limit your investment here.

WATCH

If markets were down 5% he would make a bigger allocation to this. You need to buy low and sell high. Once the market is down they are still writing calls. If the market then snaps back this one should underperform. Add to it after the markets have a good month.

COMMENT

ZDV vs. ZWC Both have similar stocks in them. If they're high-paying, quality stocks, the yield will support the stock price. When you write covered calls, BMO would be paying part of the dividend stocks on. Normally, a high-dividend stock is not so volatile.

BUY

This is a defensive to hold/buy for the next 12 months. High-dividend payers are in this ETF, and those stocks (i.e. BCE, Enbridge) are holding on well in this market. Yields are supporting their prices.

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