Opinions
Mike S. Newton, CIM FCSI
BMO US High Dividend Covered Call ETF
ZWH-T
HOLD
Oct 06, 2016
$19.500
Stock price when the opinion was issued
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It's the ideal tool to help you make quicker, more informed decisions for
managing and tracking your investments.
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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%.
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A very controversial part of the US market right now. The dividend market, which has been a darling for a very, very long time, may start encountering a little bit of stumbling when rates start moving back up. This is generally an excellent investment, but it is going to cause you a bit of grief in the short term. When you add on the covered call side of it, that is fine in a very volatile kind of sideways moving market. It will probably hold its own for a little while, but you are going to have a lot of people telling you that you shouldn’t own it. He would keep your weighting at about 4% of your portfolio.