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Larry Berman CFA, CMT, CTA BMO Europe High Dividend Covered Call ETF ZWP-T BUY Jul 14, 2025

But if you're really looking for enhanced yield out of Europe, he really likes ZWP (high dividend payers, covered call, currency exposure) or ZWE (high dividend payers, covered call, currency hedged). The charts don't show a lot of gains, but that's because they pay out a pretty significant dividend (much bigger than ZDI, which is just dividends without the covered calls).

If you're conservative and you want more tax-efficient income in a taxable account, he likes these ETFs with the covered calls a lot better.

Larry Berman CFA, CMT, CTA

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BUY

Both are good. If you want to extract yield form Europe, it is the better way to invest. Still owns them in his portfolios and strategies. One is currency hedged while the other is not.

COMMENT

For yield seekers, ZWU is a great domestic play. Yield is currently around 7%. It is interest rate sensitive and to energy. If you want European dividend plays, he would recommend ZWE and ZWP.

COMMENT

Exposure to currency is mostly hedged for ZZZD. ZPAY is always in USD. ZWP is Canada relative to European currencies. The Canadian dollar selling off is a factor, but they are also doing well because they are doing what they are designed to do.

BUY

ZWE has a currency hedge. If there is a global downtown and it is meaningful, then you would be concerned. Doesn't think we will see this. It will be a normal 5-10%. When you get the big sell-offs, you don't want to hold covered calls because you don't get the upside capture. Right now, both of these would work. Would fall less than the other names.

BUY

Great way to get exposure to Europe.
Europe challenged by growth problems, but quality ETF.
Good way to get diversified portfolio.

BUY

ZWP vs. ZWE

In general, Europe is good value compared to US or NA markets. Lower PE and book value, higher dividend. Holds underlying securities, and so gives better total return than the similar, but covered call, ZWE.

HOLD

Trim ZWU and add to ZWP?

ZWU has utilities, pipelines, and telcos (including BCE). A utility play, with a covered call strategy. Really nice way to get a lot of income in your portfolio without a lot of volatility. But very interest-rate sensitive. Lots of ups and downs over the last 5 years, mainly based on what the bond market's done.

ZWP is the equivalent of high-dividend players, but exposed to Europe. Some of the best dividend yields come out of foreign companies. Great way for Canadian investors to get income and dividend exposure in Europe. Likes it very much.

Likes both, and owns both in his ZZZD. The mix changes from time to time as he sees more value in one or the other. Most recently, he trimmed ZWU and bought some ZWEN (direct exposure to covered call energy sector).

WAIT

ZWP vs. ZWE

He had some of both this year, but right now ZWE is his preference. Going over the history of this ETF, the extreme was $1.50-1.60 CAD to euro. So anything above $1.50-1.55, you'd want to be hedged. Anything lower than $1.35-1.40, you want to be exposed to the foreign currency.

Recently we got back above $1.50. If it keeps going higher, that's fine. When you're hedging the CAD relative to Europe, their interest rates are lower than ours, and so you actually earn extra doing it.

COMMENT

A favourite ETF of his. A tax-efficient way to extract income in international markets. But the incoming America First agenda will likely be pro-US and negative other places in the world through tariffs. Dividend-paying stocks are generally not big exporters. EMs are likely to targeted far more than Europe, but Trump, he thinks, will slap tariffs across the board.

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