Utilities are good for yield seekers. Could look at ZWU with broader based with utilities + other dividend players as well as some US exposure. Overall, good for income.
An ETF for utilities. A great defensive sector with amazing performance lately. XUT-T is good, but 60% is in the top 4 holdings (inculding Fortis and Algonquin); 4% yield and 55 basis point cost. ZUT-T is more diversified and equal-weight. ZWU is also equal weight but does covered calls to create extra income, which sells future income for gains today; yields 6%. Given the strong performance of utilities in the past year, covered calls have lagged.
Prefers the BMO Covered Call Utilities (ZWU-T), which has US utilities as well, giving better diversification. The problem with utilities is that they are very, very interest rate sensitive.
He likes the utility space, but about 2 months ago he reduced his exposure. Utilities are very good instruments for providing yield, and there is a strong demand. Some have had a real run, but he doesn’t believe this basket as a whole represents the growth opportunities that the multiple is trading at. He’d rather Buy individual stocks. His favourite is Emera (EMA-T).
If your view is that utilities is going to be a good place to be in Canada for the foreseeable future, and you want to diversify away from energy and financials, it is a good holding. Be aware that some yields may not be sustainable for the long-term. Dividend yield of 4.1%.
A few stocks are responsible for most of the movement in the valuation. This ETF offers diversification, unless you have some special talent for picking the best stocks of the sector. If you have only a few of the stocks, then you are more subject to volatility. This is an equal weighted ETF and he likes it for that reason.
Tracks the Canadian Utilities sub index. It is conservative and not as volatile as the rest of the market. Diversify the risk away from owning one utility.
On utilities, he prefers the BMO Covered Call Utilities (ZWU-T), because of the covered call. It will not only get you a better yield, but will also take out a little bit of the volatility.
BMO Equal Weight Utilities Index ETF is a Canadian stock, trading under the symbol ZUT-T on the Toronto Stock Exchange (ZUT-CT). It is usually referred to as TSX:ZUT or ZUT-T
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On 2023-01-30, BMO Equal Weight Utilities Index ETF (ZUT-T) stock closed at a price of $22.8.