BMO Covered Call Utilities ETF (ZWU.TO)

So far this year, this one has outperformed the ZUT (not covered call). When there's a flat or tepid market, covered call strategy will give you better returns. Yield of ~7.3% remains pretty solid. Combination of dividends and deferred capital gains, so it's quite tax efficient.

Utilities remain kind of boring. Decent strategy if you need the income, but he's looking for more growth and capital appreciation.

For covered call strategies, always consider the yield and the source of that yield. With this one, you'll forego some upside if utilities markets are strong, but you get more yield on an ongoing basis. Best for ongoing yield to pay your bills.

Compare it to a non-covered call alternative such as ZUT. Over the long term, outperforms the covered call on a total return basis. The better growth alternative.

Given the kind of market we're heading into, some strategists feel pretty good about utilities. Utilities are considered defensive, as people need to pay them whether the economy is good or bad; tend to have stable dividends.

ZWU is far more interest-rate sensitive, as it focuses on utility companies. Generally as interest rates fall, utilities do better. HMAX is financial services, insurance, lifecos. Falling rates not necessarily good for them, because they're more sensitive to interest rate cuts for a slowing economy with prospects of a harder landing.

So, if rates are coming down due to an economic slowdown (as he believes), then ZWU will probably outperform HMAX in the short run.

Be cautious on covered call vehicles. They may not move as much as the underlying stocks. It is hard to pin down and he likes buying the stocks directly and sticking with the fundamentals and dividend for income.

Covered call, says pays great income, but remember that all utilities are tied to interest rates.

Dividend yield is strong (~5%), however don't expect large capital gains (covered call gives the capital appreciation away). Would recommend for investors interest in dividend yield. 

Excellent product with ~8% dividend yield. Concern about BCE dividend sustainability. Good time to buy.  Would recommend holding for the long term. 

ZWU's covered call will pay a higher dividend, though FTS' is solid and growing. ZWU pays more income because you're selling calls. The downside is that as interest rates decline, utilities will improve and you will lose that upside if you hold ZWU and not a plain ETF or Fortis itself. If you are positive utilities, don't use a covered call ETF.

Covered calls supplement income, but sometimes the underlying security performs better over time. Not in this case, which is rare (ZWU vs ZUT). ZWU pays an 8.5% dividend, including the covered call overlay. Share price has risen since October. Utilities are not a growth area, but bought for cash flow and income. Do you want the yield or growth?

Great dividend, but not a lot of growth in terms of earnings. So total return not spectacular. Utilities don't grow at 15% earnings growth rates the way, say, a MA would.

With covered call strategies, you're missing some of the upside over time. You have to really understand what you need this for, income is a prime reason. MERs are also usually higher.

Defensive stock with excellent yield (~7-8%). Would recommend buying on stock price lows. Not a growth company, so don't expect major capital appreciation. On flip side, would recommend trimming on peaks. 

Higher volatility option for a low volatility underlying asset(utilities). Nice enhancement option, but would recommend small position. 

Good option for investors worried about recession. Defensive name with reliable dividends. Won't be hit as hard. Also, falling interest rates good these companies. 

Nice income on this strategy. Yields about 8.25%. Interest rates are starting to steady and potentially pivot lower. As rates start to move lower, some of these dividend stocks, like pipelines or telecoms or banks, will look very attractive as they start to recover.

If you don't need the income, he prefers the underlying securities. Covered calls mean you lose out on some upside. Plus, these ETFs tend to charge higher expense ratios.

Dividend stocks should start to recover a bit once the 10 year bond yields start to back down. This ETF has a return of 5.6% so you can hold for when rates start to come down.
Also part of the question was on covered call strategies. Unless the underlying security is flat or falling you may see some under-performance related to the security itself