BMO Covered Call Utilities ETF (ZWU.TO) Buy,…

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BMO Covered Call Utilities ETF (ZWU.TO)

11.34

-0.02 (0.18%)

as of Sep 4, 2026, 7:59:57 pm Market Open.

403 watching

Investor Insights

Sep 4, 2026, 12:00 am

This summary was created by AI, based on 18 opinions in the last 12 months.

The BMO Covered Call Utilities ETF (ZWU) is viewed favorably by various experts, primarily for its ability to provide a stable income through a covered call strategy and its exposure to the utility sector, which is becoming increasingly significant amid rising power demand. Despite concerns about interest rate sensitivity, many analysts highlight ZWU's potential for defensive income, noting its attractive yield of approximately 6-8%. While some experts caution against concentrating investments in a single sector, they affirm that ZWU remains a solid choice for income-seeking investors looking for tax-efficient options. The ETF is recognized for its diversified holdings within utilities, telecommunications, and pipelines, suggesting a generally positive outlook, particularly with the growth of data centers and the ongoing demand for electricity in the U.S. Overall, the sentiment leans towards ZWU being a reliable component of a diversified portfolio, especially in the current economic climate.

Consensus

Positive

Valuation

Fair Value

Similar

XTC-T

PARTIAL SELL

Covered Call Bank ETF managed by Larry. It's one of his favourite holdings. Long term you can see it is very interest rate sensitive. Utilities, pipelines and telcos. This is not a bond replacement but it is a defensive way to play. He was adding previously but now he would be looking to trim it in preparation for adding in the next dip. He would not sell all and it is a phenomenal holding and is a core part of all his portfolios.

TOP PICK

A lot of analysts felt that utilities are trading at historically highs multiples but yields are very low. To earn a nice dividend yield, it's a good diversified way to do it.

BUY

ZWU-T vs. ZUT-T. ZWU-T includes non-traditional utilities and is a much broader way to play it. The pure utilities asset class is one of the most expensive equities on the planet. He prefers the broader diversification and the covered call overlay. ZWU-T is his preference.

BUY

It's quite popular with good yield. It's not just Canadian but also US utilities. The price has been driven up. A good choice for conservative investors.

WAIT

About a 6.2% dividend. When things are moving higher, you want to own the underlying equities or ETF. And utilities are breaking new highs.

BUY

ETF in Utilities Recommendation for TFSA. One of his favourite ways to play utilities is the ZWU-T to give exposure to Canadian and US utilities. 70/30. It has a covered call overlay. 6-7% yield expected. Not a lot of volatility.

BUY

ZUT-T vs. ZWU-T. The ETF that does not write covered calls has done significantly better. He suggests buying both. You get very low premiums for calls in the utility space.

TOP PICK

It's considered a utility, but it's a much broader scope than classic utilities. The yield is 6.5% with good diversification. May not do much capital gain, but a good place to hold.

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BUY ON WEAKNESS

Covered Call Utilities. Utilities, Pipelines and Telcos. The pipeline exposure is going to give you volatility linked to energy prices. Interest rate sensitivity is related to Telcos. Whenever we get interest rate anxiety or oil price anxiety, you get price pressure on this one. He is looking to add below $13. He thinks we will be able to hold the yield.

BUY

We're near a top, but doesn't know if we are there. ZWU is very good for conservative investors, because utilities are less volatile and risky. The covered call pays you some income, even if the ETF doesn't move up much.

WEAK BUY

Over 6% yield with possible capital gains. But utilities are getting more expensive due to demand. A good high yield utility play.

BUY ON WEAKNESS

The impact is going to be a big part on the pipeline component. Utility stocks have never been more expensive globally. It is fully valued. He would buy it at $12 or even close to $13 and would recommend it at those prices.

DON'T BUY

An ETF for utilities. A great defensive sector with amazing performance lately. XUT-T is good, but 60% is in the top 4 holdings (inculding Fortis and Algonquin); 4% yield and 55 basis point cost. ZUT-T is more diversified and equal-weight. ZWU is also equal weight but does covered calls to create extra income, which sells future income for gains today; yields 6%. Given the strong performance of utilities in the past year, covered calls have lagged.

BUY ON WEAKNESS

There are three interesting sectors: The traditional utilities that are rather overvalued; the telcos in Canada are good plays. They are not fully valued but not cheap; The pipelines are more linked to energy prices. He would agree that the sectors are fairly fully valued but he likes that it is defensive and has a yield. 5% lower and he would start nibbling at it.

BUY

ZWU or ZWE Both are good defensive strategies. ZWE: He's not that bullish on Europe, but at least you get income from writing the covered calls here. ZWU: Utilities are much less volatile and more stable, yet expose you to Europe. If you belive in Europe and playing defence, then both ETFs are fine. These two ETFs are highly correlated, rising and falling together. Note that utilities are risk-off, not for you if you have long-term bullish.

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BMO Covered Call Utilities ETF (ZWU.TO)