Stockchase Opinions

Richard Croft BMO US Hi Div Cov Call Hdgd to CAD ETF ZWS-T DON'T BUY Jul 03, 2019

Do you recommend ZWS as a hedged covered call or prefer something else, and would you hold it at the only US equity in a portfolio? To answer the latter, no. And he prefers SPY-N as your core holding; it pays you yield and cash flow, becuase it holds high-dividend stocks and sells covered calls against them. Also, US dividends are taxed in Canada and don't benefit from the dividend tax credit.

$19.820

Stock price when the opinion was issued

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COMMENT

Contains many good companies including utilities and consumer staples. Just collect the dividend, though you don't need the covered call portion on this. Look for a BMO ETF that's unhedged without the covered call aspect, instead.

WEAK BUY
ZWA-T vs. ZWS-T. ZWA-T is the Dow 30 with a covered call overlay. ZWS-T is a broader ETF with 50 holdings, much more diversified and just the DOW index and it also has a covered call overlay. He would prefer ZWS-T. He is looking at buying a lot more of this one.
BUY

BMO has the biggest suite of covered call strategies around the world. For US high-dividend covered-call strategies, ZWS or ZWH are really good (one hedged, one not).