BMO Covered Call Cdn Banks ETF

ZWB-T

Analysis and Opinions about ZWB-T

Signal
Opinion
Expert
BUY
BUY
April 11, 2016

They write covered calls on only half the portfolio. Typically they are one and two months down the road and then they are rolled over. They write one standard deviation above the current price. They only rebalance the portfolio twice a year. The covered call overlay is very important as banks are going to go sideways for some time.

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They write covered calls on only half the portfolio. Typically they are one and two months down the road and then they are rolled over. They write one standard deviation above the current price. They only rebalance the portfolio twice a year. The covered call overlay is very important as banks are going to go sideways for some time.

COMMENT
COMMENT
April 1, 2016

This gets extra income from writing Calls options on the banks. If you do have a good run on a bank, you can get called out and not capture the full upside. Good dividend which is targeted, rather than having fully earned it.

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This gets extra income from writing Calls options on the banks. If you do have a good run on a bank, you can get called out and not capture the full upside. Good dividend which is targeted, rather than having fully earned it.

COMMENT
COMMENT
March 14, 2016

The covered call overlay is actively managed. When they are called away they have to actively buy back the holding.

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The covered call overlay is actively managed. When they are called away they have to actively buy back the holding.

BUY
BUY
March 7, 2016

Covered call overlay should outperform in a sideways market. Money in banks is dead money.

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Covered call overlay should outperform in a sideways market. Money in banks is dead money.

COMMENT
COMMENT
February 29, 2016

If there is financial systemic risk, banks underperform considerably. It is not a risk-free, easy place to go.

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If there is financial systemic risk, banks underperform considerably. It is not a risk-free, easy place to go.

BUY
BUY
February 16, 2016

Really likes this. Has a good dividend yield. Likes the way they manage it, having only about 60% at any given time.

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Really likes this. Has a good dividend yield. Likes the way they manage it, having only about 60% at any given time.

TOP PICK
TOP PICK
January 18, 2016

A core position for him. It has weakened now, so he likes it even more. He is not negative on Canadian banks. They have been positioning themselves by Selling preferreds, to make sure they top up their capital situation. Also, with the covered call overlay, that is very useful in terms of boosting the yield, but they leave part of it uncovered too.

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A core position for him. It has weakened now, so he likes it even more. He is not negative on Canadian banks. They have been positioning themselves by Selling preferreds, to make sure they top up their capital situation. Also, with the covered call overlay, that is very useful in terms of boosting the yield, but they leave part of it uncovered too.

DON'T BUY
DON'T BUY
December 9, 2015

BMO Covered Call Cdn Banks (ZWB-T) or Horizons Enhanced Income Financials (HEF-T)? It is probably time to move from a Covered Call scenario where they yield 7%. If we do have a rising rate environment again, it is going to be a bit more of a “south of the border” scenario. If it is a North American phenomenon and we don’t hit the wall that everybody has been waiting for, then just being Long the Canadian banks, without having covered calls is the way to go. Thinks the US banks have a lot of upside.

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BMO Covered Call Cdn Banks (ZWB-T) or Horizons Enhanced Income Financials (HEF-T)? It is probably time to move from a Covered Call scenario where they yield 7%. If we do have a rising rate environment again, it is going to be a bit more of a “south of the border” scenario. If it is a North American phenomenon and we don’t hit the wall that everybody has been waiting for, then just being Long the Canadian banks, without having covered calls is the way to go. Thinks the US banks have a lot of upside.

BUY
BUY
December 3, 2015

A Covered Call strategy owning some of the major banks and paying a premium based on a Call Strategy along with the dividends. When using Covered Call strategies, if you feel the sector is going to be somewhat flat or moderately moving higher, it is a good strategy. If you feel the sector is moving down or going to take off, you probably don’t want to own the sector. In a Covered Call strategy, you will be called out of the securities as the shares move higher. Bank stocks have been kind of flat in the last little while, so it is actually not a bad strategy to own while picking up that extra premium through the yield.

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A Covered Call strategy owning some of the major banks and paying a premium based on a Call Strategy along with the dividends. When using Covered Call strategies, if you feel the sector is going to be somewhat flat or moderately moving higher, it is a good strategy. If you feel the sector is moving down or going to take off, you probably don’t want to own the sector. In a Covered Call strategy, you will be called out of the securities as the shares move higher. Bank stocks have been kind of flat in the last little while, so it is actually not a bad strategy to own while picking up that extra premium through the yield.

COMMENT
COMMENT
December 2, 2015

Has this as pretty much of a core portfolio holding. Some of the banks were getting a little beaten up of late, but some have bounced back. Paying around a 5.5% dividend. Rather than buying a covered call yourself, you can just use this if you like Canadian banks.

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Has this as pretty much of a core portfolio holding. Some of the banks were getting a little beaten up of late, but some have bounced back. Paying around a 5.5% dividend. Rather than buying a covered call yourself, you can just use this if you like Canadian banks.

COMMENT
COMMENT
November 30, 2015

ZEB-T Vs. ZWB-T. He does not like the growth in earnings outlook for Canadian banks over 3-5 years. Prefers ZWB-T because of the covered call overlay. If the banks went down 20% for some reason then he would look at ZEB-T again.

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ZEB-T Vs. ZWB-T. He does not like the growth in earnings outlook for Canadian banks over 3-5 years. Prefers ZWB-T because of the covered call overlay. If the banks went down 20% for some reason then he would look at ZEB-T again.

BUY
BUY
November 24, 2015

High quality product. Great diversification. He favours this as an investment going forward.

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High quality product. Great diversification. He favours this as an investment going forward.

COMMENT
COMMENT
October 19, 2015

This one only writes covered calls on half the portfolio, so it will not be as held back as much if banks really take off. The covered calls are above the money so you are not giving up as much upside.

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This one only writes covered calls on half the portfolio, so it will not be as held back as much if banks really take off. The covered calls are above the money so you are not giving up as much upside.

HOLD
HOLD
September 30, 2015

They take their equal weight banks and write calls against the banks so it boosts the income. He doesn’t own Canadian Banks. He is looking for a buying signal.

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They take their equal weight banks and write calls against the banks so it boosts the income. He doesn’t own Canadian Banks. He is looking for a buying signal.

BUY
BUY
September 24, 2015

The thing with any Covered Call strategy is that it is predicated upon the risk of the underlying stock or ETF. He holds a lot of this, and it is pretty much a core holding. This yields about 5%-5.5% minus the fees.

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The thing with any Covered Call strategy is that it is predicated upon the risk of the underlying stock or ETF. He holds a lot of this, and it is pretty much a core holding. This yields about 5%-5.5% minus the fees.

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