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TSE:ZWU

BMO Covered Call Utilities ETF (ZWU.TO)

12.02
+0.01 (0.08%)
as of Jun 15, 2026, 7:59:00 pm Market Open.
402 watching
0
Investor Insights
star iconJun 15, 2026, 12:00 am

This summary was created by AI, based on 22 opinions in the last 12 months.

Experts generally view the BMO Covered Call Utilities ETF (ZWU) as a solid investment choice for those seeking income through dividends while providing exposure to utility stocks. The ETF boasts a respectable yield in the range of 6-8%, supported by a diversified portfolio that includes utilities, telecommunications, and pipelines. While there is recognition that ZWU is sensitive to interest rates, many experts believe its defensive nature makes it suitable during economic uncertainties. The covered call strategy employed adds an income component but can limit upside potential compared to directly holding the underlying securities. Overall, analysts suggest that ZWU could serve as a meaningful part of a well-rounded investment portfolio, particularly for income-seeking investors looking for tax-efficient returns.

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Consensus
Positive
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Valuation
Fair Value
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PPL
BUY

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. 

BUY

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

DON'T BUY
Fortis vs. ZWU

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.

COMMENT

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?

DON'T BUY

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.

BUY ON WEAKNESS

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. 

PARTIAL BUY

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

BUY

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. 

WEAK BUY

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.

HOLD

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

BUY

Likes stock at $10 or $11 (better value). Good for yield seeking investors. Underlying assets very safe. Good time to buy. 

HOLD

8%+ dividend yield due to covered calls. When rates start turning down, these names will benefit and move higher. 71 bps, more expensive than average. Great for income, nice payment as you wait for the turnaround.

HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

With the ROC component, the after-tax yield compares very well to alternatives, but it is hard to say whether it fully compensates, as investors have different tax brackets. If we look shorter term, its five year return is better, at 3.1%. But over ten years, it is down 26%, but with distributions 10-year net is 4.08%. Considering the very weak performance of the last year as interest rates spiked, we would still consider this 'OK' all things considered. 
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick May 23/23, Down 8.6%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ZWU has triggered its stop at $10.25.  To remain disciplined, we recommend covering the position at this time.  Combined with the previous buy recommendations, this will result in a net investment loss of 10%.

HOLD

Owns full position in this stock.
Good time to buy given current price.
Lots of value with industry fundamentals.

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