Stock price when the opinion was issued
70% Canadian utilities, 30% US. Includes companies such as pipelines, telcos, and traditional utilities in the energy creation and delivery space like ENB. Holds about 15-20 stocks, but with the option overlay to get the extra yield. So it's a combination of that that makes up your 60 holdings. Not a lot of turnover.
He recently trimmed exposure. Very interest-rate sensitive. So as bond yield go up in the short term in the US, there are headwinds in front of us. The pipeline component is more sensitive to the energy space, which is coming under a bit of short-term pressure. Hurting performance in recent years has been the likes of BCE, formerly a $60 company but now $45.
A basket of really good companies, high yielder. A range trader, not a bond alternative.
Includes telcos likes BCE, Telus, and Rogers, as well as utilities. Still likes it a lot, has it in his global dividend strategy. He reduced exposure on recent rally, moving to ZPAY for the lower risk. Before adding, wait for it to hit the low $10s.
He feels that interest rate pressure is coming to long end of the curve. A lot of these utilities are capital intensive, so likely to see additional downside. Underweight for now; look to buy into weakness, but not today (BCE is the catalyst for today's move).
Utilities are a very low-volatility sector, so the premiums are lower compared to oil/gas. He suggests holding both this and XUT-T. Utilities are a top sector, because valuations are so reasonable (hard to find that in this market). ZWU will give you covered calls, but XUT will give you upside. So, own both, half and half.
That's a very specific question about one investor and their financial circumstances, risk tolerance, etc.
If we're going into an environment of slower economic conditions, then ZWU is likely to do a bit better. This would be due to the Canadian banks pulling back. He loves them both, great exposures. A bit concerning if all a retiree's portfolio is in just those two vehicles; there's not much diversification either within or outside of Canada.
Consider adding ZPAY, which gives you some US exposure to big banks and tech, and with a lower risk profile.
Very good yield. Just remember that the utilities sector is very vulnerable to interest rate changes. If rates go up, high regulation means they can't increase prices to consumers. Great way to earn tax-enhanced income.
He likes covered calls, but the big tradeoff is that you can give away upside. The option premium boosts the return.
Remember that a GIC and dividend stock have different levels of risk. Consider preferred shares and covered call ETFs like ZWC which gives broad exposure to Canadian dividends with a covered call overlay. ZWU, too, which is an alternative to fixed income, but gives equity market risk.
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).