Opinions Terry Shaunessy
BMO US High Dividend Covered Call ETFZWH.TODON'T BUYJul 22, 2014
$15.92
Stock price when the opinion was issued
$26.75
As of Jun 05, 2026. Market Open.
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TOP PICK
Main thing is it's not leveraged. Holds all the big, household names. Dividends are small on US stocks, so most of the premium you're getting is from the covered calls which are capital gains. Hasn't come back from April because it doesn't have all the super-charged tech stocks. Yield is around 6-6.5%.
John HoodOwned
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TOP PICK
Likes it as a sector play--high-dividend US stocks--and for the dividend of 6%. It's broadly based, and bonds don't pay much or anything.
John HoodOwned
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COMMENT
There is space for these ETFs for yield seekers. One of the challenges in 2020 was that dividend paying stocks did terrible relative to technology that does not pay dividends. Still likes them for conservative investors.
Larry Berman CFA, CMT, CTAUnknown
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WEAK BUY
ZWE-T vs. ZWH-T. With covered calls, when you are in a slightly up or down or sideways market, the call brings in a premium and dampens the volatility. But when it is in a very strong uptrend, the covered write lops off the top of the uptrend. The upside is capped. In a sharp declined followed by a snap-back rally, the same thing applies. You should have both for covered write portfolios to increase diversification if you are going to have them.
Covered Calls tend to seduce investors because of the high yields that are there, but if you look at them they also have very high fees. He tends to dissuade people from using ETF’s that have an active component or leverage using a covered call strategy. There are all sorts of balls in the air. You are taking the risk of US banks and of the option writer as well as the volatility in the market. There is also a tax issue.