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

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BMO Covered Call Utilities ETF (ZWU.TO)

12.14

+0.05 (0.41%)

as of Jul 24, 2026, 7:55:06 pm Market Open.

402 watching

Investor Insights

Jul 26, 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-T) is attracting attention from investors due to its diversified exposure to the utility sector, generating a yield estimated between 6-8%. Experts acknowledge that utilities tend to be sensitive to interest rate changes, but the outlook remains positive with increasing power demand, especially in the U.S. driven by sectors like AI and data centers. While the ETF employs a covered call strategy, which reduces potential upside, it’s deemed suitable for investors seeking income amidst a generally stable utility market. Many experts suggest this ETF can serve as a component of a broader portfolio, providing tax-efficient dividends while mitigating overall risk. Strategic allocations in ZWU rather than focusing solely on equities are encouraged, particularly for conservative income-seeking investors.

Consensus

Positive

Valuation

Fair Value

Similar

XDV

PAST TOP PICK

(A Top Pick Apr 02/19, Down 8%) He sold out of this one a while ago. Covered call strategies are good in flat to rising markets, not so much during down turns.

WATCH

There is more volatility to come. The government of Canada wants to minimize the energy industry. There is a serious push for climate change. You'll get a lot more support in the US than in Canada, but you have to consider the tax implications if it is a cash account instead of a registered account. The current situation will require cuts from every nation.

HOLD

With volatility higher now, you get more premium when you write covered calls. After major market declines, you don't get the same bounce back with the covered call overlay. He has not added it recently. He prefers ZUT-T or stay with ZWU-T for the yield.

DON'T BUY

This covered call utility ETF holds a portfolio of utility stocks that sells call options. This caps the upside for any potential recovery. Even with the premiums and dividends collected it has lagged a typical utility ETF. You end up taking 90% of the downside but only 50% of the upside. In a sideways market it can enhance your returns, but lags other in a bull market. He would pass on this one.

PARTIAL BUY

The pipeline component is probably the most volatile. The dividend comes from the option premium and the utilities. It is probably at a point where you can put a half to a third of the money you are thinking of to work.

BUY ON WEAKNESS

The corona virus could make for a couple of ugly quarters globally. Global growth is downgraded to basically zero. We saw a trading dip to $13 below which he suggested in the past you get into this but he would be looking below $13 now and have some patience here.

COMMENT

A US ETF in infrastructure or utilities? Can't think of an infrastructure one, but ZWU holds Canadian as well as American utilities.

WAIT

Covered call Utilities, pipelines and telcos. It has not gone up and he has not sold it, but it could pull back 10% in a broad market correction. ZPAY-T combined with ZWU-T would give a nice diversified exposure. He would wait for pullbacks to deploy new money.

DON'T BUY

He wouldn't buy this now. It's up over 20%. He doesn't like covered calls usually. Chasing dividends could mean that you are taking on underlying risk. It's probably too late to enter.

WATCH

He loves the dividend and the strategy. He is the biggest holder of this fund by a long shot. Around $14 he finds he does not love it for capital growth. If we get a pull back then he would go for it.

COMMENT

He likes it for cash-flow with excellent yield. A great alternative to bond funds. There’s a good spread of dividend paying companies. The dividends are relatively safe. It hovers around $14. He would wait for a pullback below $14.

BUY

Harvest is the same as BMO except for being more global. ZWU-T has been outperforming HUTL-T over the last year or so because the European stocks have not performed as well as domestic or US stocks.

COMMENT

Yield is 6.25-6.5%, which is pretty good. If you believe the underlying securities will do well over the next few months, you're better off owning those securities as you'll get more in capital growth. But if you think they'll go sideways, you're better off with the ETF. Very defensive.

PAST TOP PICK

(A Top Pick Nov 30/18, Up 16%) The utilities surprised him by going through a flat period where they didn’t do well. If you’re searching for yield, this is a good ETF. A yield over 6 percent. A good place to park your money for cash-flow.

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.

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BMO Covered Call Utilities ETF (ZWU.TO)