BMO Covered Call Utilities ETF (ZWU.TO)

Utilities, pipelines, telcos, big dividend players with a covered call overlay. Quite an interest rate sensitive sector. This is a time to look at this. If you are a total return investor, this is not necessarily going to give you a lot of growth. If you are a yield investor, it is a great, great holding for a nice yield and lower volatility in the broader markets.

He has a full position. It is a great holding. The covered call gives you an enhanced yield. He would look to sell if it went over $15.

He likes this. Remember that utilities are a little bit like REITs and are interest sensitive. However on this one the indicated yield was about 6% including covered calls and dividends. He would be a little bit on the cautionary side when interest rates start to move, but in the interim buy it.

Caller was at 10%. He feels this is okay for an ETF and so the caller should not add to or reduce his position.

Covered Call Utilities. Loves it as part of a holding. Has a 6-7% position. Utilities, telcos and pipelines, 20% in the US. Not without risk. It is interest rate sensitive. 5.5-6% yield.

Has been a good name to own. The Covered Call nature helps mitigate an “interest rate hike” risk. The only concern that he has is that it is about 35% energy, and that is always going to cause a little bit of grief. Believes this has both Canadian and US exposure, and this is probably a good entry point.

Utility stocks are the lowest end of the spectrum in terms of volatility. There is some energy exposure so this one really isn’t a risk free dividend. It will be less volatility than pure energy. We should have a bottom in the energy sector in the next couple of months.

(A Top Pick June 7/13. Up 13.53%.) This got hit when there was the tapering tantrum, but has come back quite nicely. Has a fairly reasonable yield if you are looking for that. Prefers ZLB-T. The Call aspect, where they get called away in a rising market, has not helped their earnings at all.

As long as you understand how covered calls work i.e. they limit your upside. It has been a great performer. 5.7% dividend yield.

As equity-based products go, this is a pretty conservative one. It is diversified, so that makes it conservative, but utilities are conservative because you have a steady income stream. You also have the covered call overlay which gets you the income of covered calls. If things go up a lot, you get called away. A good, steady sort of thing to use for people who want growth, but are still conservative in trying to get it.

Telcos and pipelines. Some US utility exposure and a covered call overlay. Telcos are about 15%.

Covered calls work where a stock doesn’t move much, so this is a great opportunity for covered calls.

Likes this because it is a Covered Call situation. Utilities did get beaten up. This is something that he would like to have as part of his income side of a portfolio. Yield of 6.25%.

It is down because when Fed started talking about tapering, everything interest sensitive went down. It had nothing to do with covered call strategy. 6.5% yield.

A covered call ETF on utility stocks. Has not done particularly well because utility companies tend to be interest-rate sensitive. As interest rates rise, a lot of the utility companies tend to go down because they tend to be supported by the dividend. Yield of 6.32%.