BMO US High Dividend Covered Call ETF (ZWH.TO)

ZWH-T vs. ZWA-T. ZWH-T is high dividend exposure split across all economic sectors, but you have exposure to the US$. ZWA-T is narrower and has a currency hedge. For new money he would not put it into these as he is raising cash as he thinks another pullback is coming.

Recently sold his holdings. Had done well on the currency side, but was getting beaten up along with everything else. He likes this ETF. If you have concerns the Cdn$ might improve over the next little while, then he would go with the ZWA, which is hedged against a decline in the US$.

How will this react when the Cdn$ starts to rise? He likes this question because it will have an effect. This ETF really didn’t do anything because of growth, it only made money because of currency. It is basically higher yielding S&P stocks. When there is an appreciation in the Cdn$, this could get hurt. He is not buying this now.

(A Top Pick Dec 30/14. Up 17.89%.) This is higher dividend stocks with more of AT&T and GE type of holdings. This is bought on the Toronto exchange, but is basically unhedged and some of the appreciation is from currency. A very good Covered Call product.

It has been one of his favourite ETFs: dividends from the US with a covered call overlay. He has gotten out of this exposure because he wants to be a currency hedged investor through, e.g. ZWA-T.

Doesn’t think interest rates are going to soar to any great degree, and you are getting a good return on this. If you are after yield and a good quality portfolio, this is a good place to be.

With this all of your gains during the last year, have basically been from currency. Although it trades in Canada, it is essentially US$, and isn’t hedged. He likes this.

This is taking S&P stocks that are paying a higher dividend, and writing Calls on it. They also have one based on the 30 Dow stocks, BMO Dow Jones Industrial (ZWA-T). What he really likes about these things is that they are not writing Calls on an index, they’re writing them on all 30 stocks (or all 6 banks), so you are getting a better rate of return.

(A Top Pick Sept 2/14. Up 20.35%.) Still likes it.

(or ZWA-T). Can low volumes be a problem? No. Unless you are a day trading there is no issue. You have the liquidity of the underlying holdings. The market makers make the market for you.

This is a basket of dividend paying equities. They have covered calls written against them. What BMO does with most of their funds, which he assumes they are doing with this one, is that they don’t write covered calls against the whole portfolio, which is a positive. This gives the portfolio an opportunity to recover. You are going to get a US monthly pay. There is nothing wrong with this. A good play.

A US ETF to get US dividends? Be aware that any dividends received as a Canadian is taxed as income, not as a dividend. He would suggest something like this, a Covered Call on the S&P on the higher dividend yield ETF’s. Dividends will be taxed, but the capital gains will come to you as capital gains. This one is pretty stable.

The underlying portfolio looks good as they are dividend growers. The covered call policy has been accretive. Just stay in it.

Covered Calls are one of his favourite vehicles. He uses them for about 10% of the portfolio, because the returns on fixed income are so meagre. This is usually pretty close to 5.5%-6%.

Weaker Canadian dollar is better for the forestry industry, but how much is priced in right now? This one gives exposure to all 10 economic sectors, covered call overlay and a great way to get yield into your portfolio. But he is reducing his exposure to the Canadian/US dollar exchange rate.