BMO Dow Jones Indus. Avg. Hedge ETF (ZWA-T)

Likes this, but prefers ZWH for its much-higher dividend yield. But it's okay to hold onto ZWA.

Likes it. A little more restricted than the ZWH, and the yield is about 1.5% lower than that one. Might be better for growth instead of income.

(A Top Pick May 18/18, Up 5%) Covered call adds yield when the market goes sideways, as it usually does in the summer. You don’t have to time the market, you just participate and take down portfolio risk.

Extra 2% return on the Dow. A way to mitigate volatility. Play on the broad market in a good economy.

(Top Pick Jun 28/17, Up 0.73%) The Dow has been the place to be. It has been a great hold. He likes the covered call aspect for the summer. You can collect the extra yield in that time.

Increasing US exposure in the TSX ETF? There are a couple he would look at. BMO Dow Jones Indus. Avg. Hedge (ZWA-T), which is a covered call on the Dow stocks, as well as BMO US High Dividend Covered Call (ZWH-T) which is based on the higher dividend paying S&P. He likes both of these. They are more expensive because they are Covered Calls, but is quite impressed with the value added. He has a lot of these.

He likes covered call strategies during the summer. If we are expecting a flat to negative print on the broad market tape, then really you want to be in some of these covered call names. In a higher trending market, you are going to be called away from these positions, which is detrimental to the price of these covered call ETFS. In a flat to negative trending market, you are benefiting from the covered call overlay, which is 2% above the benchmark yield of about 2.7%.

DOW mature blue chip companies with a covered call overlay. ZPW-T or a hedged version, which is even better, would be better going forward.

ZWH-T vs. ZWA-T. ZWH-T is high dividend exposure split across all economic sectors, but you have exposure to the US$. ZWA-T is narrower and has a currency hedge. For new money he would not put it into these as he is raising cash as he thinks another pullback is coming.

Dow with a covered call overlay and a currency hedge. He prefers this to a basket of blue chips in the US. ZUD-T is top dividend payers in the US with a currency hedge.

A covered call on the Dow. He still likes it. A core covered call holding for him. They take all 30 Dow stocks and sell calls against each of them individually. When you are selling calls on individual stocks “in” a basket, you are doing better than if you were just selling calls “on” the basket.

How does hedging work? Every month they look at the assets and write a forward contract on the currency. The cost of hedging between US and Canadian $ is relatively low. It costs 25-50 basis points and is part of the tracking error, rather than the MER.