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

Home

Daily Stock Opinions and Ratings

BMO Covered Call Utilities ETF (ZWU.TO)

11.00

-0.01 (0.09%)

as of Oct 15, 2026, 2:10:48 pm Market Open.

403 watching

Premium content

It's a Monthly Gems opinion which is available only for Stockchase Premium

Curated by Allan Tong since 2019.
99+ opinions with 4.15 rating.

TOP PICK

The BMO Covered Calls Utilities ETF, pays a big 7.52% dividend and charges a 0.71% MER. The biggest holdings are ZUT, the BMO Equal Weight Utilities ETF, Enbridge, TC Energy, Pembima and Fortis. Those with ESG concerns, take note that these are pipeline names. ZWU also holds telcos, including Rogers, BCE and Telus. Both classes of stocks are solid dividend payers. All Canadian. ZWU is fairly liquid, averaging 377,000 shares daily.

BUY

Utilities, pipelines, telecoms. Very nice dividend of around 7.6% with the covered call. YTD, down only 1.24%, which is not bad. Good name for income, not a ton of capital appreciation.

WAIT

Based on utilities. In a rising rate environment, because they're heavily regulated, they can't just go out and change rates on their own. So these could take a bit of a hit. You might want to wait a couple of weeks to see what the first real interest rate increases are going to be and buying it then. Yield is really good. In general, a good ETF.

BUY ON WEAKNESS

Has traditional utilities, pipeline and telcos. All good dividends with high covered call exposure with a yield of 7%. Would not add here. Wait until it comes down. Some interest rate sensitivity but a solid yielder. Have to be mindful of oil prices for the pipeline and interest rates.

BUY ON WEAKNESS

Trimmed it around $13. Loves it for the yield principles and stability over time. It is sensitive to interest rates and energy. These two are in play right now. Would trade around with it. If it dips, would add to it. At $13, it is richly valued. Need to know if you want to own it for distributions or to trade.

DON'T BUY

it's underperformed the bank ETF since inception. So, the covered call isn't adding value, but rather generating fees.

DON'T BUY

FSZ vs. ZWU Both pay around an 8% dividend, which at that level it's probably not pure dividend you're getting on a long-term basis. About 6.5% is the limit for a sustainable dividend level. Plus, you get worries about the future of hydrocarbon demand. He himself doesn't see this, but it's a scenario to consider. Both FSZ and ZWU, you're getting some of your capital back to fund their dividends--this is not sustainable. ZWU has underperformed the equal-weight bank ETF since inception. So, the covered call portion isn't adding value, but is an additional-fee generator. He's rather buy the underlying stocks. Fiera has done a ton of purchases, not all of them cheap or good. Their wealth management business has been positive in the last 18 months, but you risk a market correction and a major re-pricing of assets, more so than any Canadian bank.

BUY

ZWU vs. ZWE Includes telecoms, pipelines, and electric companies as well as utilities. Good for conservative investor, who wants a nice yield of tax-efficient income. Very good yield about 7.5%. Longer term, you might have more growth in ZWE if you can look beyond the next 6-12 months.

Wealthica Track your Stocks in your Watch List

COMMENT

Caller had a question on tax treatment. About 30% of the dividend stream comes from US corporations. This would see withholding tax. The capital gains coming from the covered calls are cap gains, and the dividends from Canadian companies will see beneficial tax treatment and the US dividend will be taxed.

DON'T BUY

For the long term The only problem is that utility stocks rely on government contracts, so are vulnerable to an increase in interest rates; they can't adjust quickly. So, if rates rise, utilities will decline even though the dividends now look attractive.

BUY

He likes ZWU, a basket of telecoms and pipelines, where you get the high yield plus the covered call option premiums.

BUY

Caller asked for an infrastructure ETF. Gives you exposure to aspects of infrastructures like pipelines, utilities, and telcos. Aspects of infrastructures are there. Lots of different ways to look at infrastructure. PAVE gives you access to roads and infrastructure.

BUY

A good ETF to get exposure to pipelines, telecos and other high dividend paying utilities. There is a covered call enhancements on top of it. Pays a 6-7% on average, which is great for dividend seekers.

COMMENT

Hard to say which one would perform the best in a correction. ZZZD has a very defensive posture with half of the portfolio hedged to downside risk. ZWU and ZPAY are in ZZZD. Would look to be defensive in the next few months.

COMMENT

There is dividend from the underlying companies and there is also yield from covered calls. The stock price adjusts on the ex-dividend experience.

Showing 91 to 105 of 267 entries

Most Recent Experts

The Panic-Proof Portfolio (Stockchase Research)

Stockchase Premium

The Weekly Buzzing Stocks by Billy Kawasaki

Stockchase

Jim Cramer - Mad Money

CNBC

Chris Blumas

at Raymond James Investment Counsel Ltd.

Jerome Hass

Lightwater Partners

Stockchase, in its reporting on what has been discussed by individuals on business television programs (in particular Business News Network), neither recommends nor promotes any investment strategies.

We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

Halloween Sale

BMO Covered Call Utilities ETF (ZWU.TO)

It's a Monthly Gems opinion which is available only for Stockchase Premium