BMO Europe High Dividend Covered Call Hedged to CAD ET (ZWE-T) Stock Predictions - Stockchase
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BMO Europe High Dividend Covered Call Hedged to CAD ET (ZWE-T)

ON STOCKCHASE SINCE Sep 2015

E.T.F.'s

BMO Europe High Dividend ... BMO Europe High Dividend Covered Call Hedged to CAD ET
ZWE-T

35 70
E.T.F.'s

BMO Europe High Dividend Covered Call Hedged to CAD ET (ZWE-T) SAVE

20.34

0.33 (1.65%)

Oct, 20, 2018, 12:00 am

OPINIONS

What the experts are saying about ZWE-T



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COMMENT

ZWE-T vs. ZWU-T vs. ZWB-T.  A 100% stake in anything is generally a bad idea.  These three give you 2/3rds of your portfolio seeking dividends in Canada.  He would add ZPW-T for US put writes.  ZWH-T would give you a broader exposure.  He would underweight Canada.

E.T.F.'s

ZWE-T vs. ZWU-T vs. ZWB-T.  A 100% stake in anything is generally a bad idea.  These three give you 2/3rds of your portfolio seeking dividends in Canada.  He would add ZPW-T for US put writes.  ZWH-T would give you a broader exposure.  He would underweight Canada.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$0.000
Owned Owned
Unknown

BUY

[Are the dividends safe?]  BMO in their screen looks at the leverage ratio of the companies to see if they will be stressed in terms of paying their dividends.  It is still a good holding.

E.T.F.'s

[Are the dividends safe?]  BMO in their screen looks at the leverage ratio of the companies to see if they will be stressed in terms of paying their dividends.  It is still a good holding.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$0.000
Owned Owned
Unknown

BUY

ZWE-T or ZWP-T.  European market.  Covered calls.  You get less upside participation but get a higher yield.  ZWE-T is currency hedged and ZWP-T is not.

E.T.F.'s

ZWE-T or ZWP-T.  European market.  Covered calls.  You get less upside participation but get a higher yield.  ZWE-T is currency hedged and ZWP-T is not.

E.T.F.'s
Daniel Straus

Head of ET, National Bank Financ...

Price Price
$20.010
Owned Owned
Unknown

BUY

Likes this. He'd buy this if he were playing Europe. But diversify with, say, ZWU, which does covered call for utilities and has expanded beyond Canadian utilities into the U.S. Also look at ZWA and ZWH for further diversification. He likes all these covered calls. The fees are high, but he has seen first-hand the added value these products give.

E.T.F.'s

Likes this. He'd buy this if he were playing Europe. But diversify with, say, ZWU, which does covered call for utilities and has expanded beyond Canadian utilities into the U.S. Also look at ZWA and ZWH for further diversification. He likes all these covered calls. The fees are high, but he has seen first-hand the added value these products give.

E.T.F.'s
John Hood

President , J. C Hood Investment...

Price Price
$20.130
Owned Owned
Unknown

COMMENT

The consensus is very negative on Europe. It would tend to overweight the classical defensive sectors and on top of that they are selling calls. If you are betting on the recovery of Europe, you wouldn’t want to use this. He prefers a purer play on Europe.

E.T.F.'s

The consensus is very negative on Europe. It would tend to overweight the classical defensive sectors and on top of that they are selling calls. If you are betting on the recovery of Europe, you wouldn’t want to use this. He prefers a purer play on Europe.

E.T.F.'s
Tyler Mordy

President , Forstrong Global Ass...

Price Price
$20.820
Owned Owned
No

BUY

BMO finds the best European dividend payers spread across many countries and sectors, then write a covered call overlay. It pays a dividend over 6% and has kept it very well with markets. It's his favourite way to play Europe.

E.T.F.'s

BMO finds the best European dividend payers spread across many countries and sectors, then write a covered call overlay. It pays a dividend over 6% and has kept it very well with markets. It's his favourite way to play Europe.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.230
Owned Owned
Unknown

COMMENT

ZWC vs. ZWE vs. ZWU. ZWC has a lot of the good dividend payers with a covered call overlay. ZWU is lower risk than ZWC, as it doesn’t have exposure to energy and financials. If interest rates go up in a big way, ZWU will underperform, and could easily go down 3-5%. The dividends for these are safe. ZWU is attractive from a defensive standpoint. ZWE has exposure to the 3 biggest country markets, very few financials, a currency hedge, little Italy exposure. It could fall 5-7% in the next months, and then it would be a pretty decent buy.

E.T.F.'s

ZWC vs. ZWE vs. ZWU. ZWC has a lot of the good dividend payers with a covered call overlay. ZWU is lower risk than ZWC, as it doesn’t have exposure to energy and financials. If interest rates go up in a big way, ZWU will underperform, and could easily go down 3-5%. The dividends for these are safe. ZWU is attractive from a defensive standpoint. ZWE has exposure to the 3 biggest country markets, very few financials, a currency hedge, little Italy exposure. It could fall 5-7% in the next months, and then it would be a pretty decent buy.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.090
Owned Owned
Unknown

BUY

A way to play European market and has covered calls. Neat thing is it has a 5-6% yield. Conservative way to play Europe, though limited upside because of the covered call.

E.T.F.'s

A way to play European market and has covered calls. Neat thing is it has a 5-6% yield. Conservative way to play Europe, though limited upside because of the covered call.

E.T.F.'s
John Hood

President , J. C Hood Investment...

Price Price
$21.190
Owned Owned
Yes

BUY

This is the best quality of dividend payers, pan-Europe.  They are diversified around Europe.  He likes the exposure and is probably the single largest holder.  It yields a little more than 6% with the covered call overlay and it has a currency hedge also.

E.T.F.'s

This is the best quality of dividend payers, pan-Europe.  They are diversified around Europe.  He likes the exposure and is probably the single largest holder.  It yields a little more than 6% with the covered call overlay and it has a currency hedge also.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.250
Owned Owned
Yes

BUY on WEAKNESS

He likes this and is the best way to hold Europe.  He is looking to add more on weakness.  You get the currency hedge.  It is his biggest international exposure in all the funds he manages.

E.T.F.'s

He likes this and is the best way to hold Europe.  He is looking to add more on weakness.  You get the currency hedge.  It is his biggest international exposure in all the funds he manages.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$20.820
Owned Owned
Yes

HOLD

It is his favourite way to play Europe.  It is yielding 6%.  It holds the highest quality dividend paying companies.  He may reconsider it in 6 months.

E.T.F.'s

It is his favourite way to play Europe.  It is yielding 6%.  It holds the highest quality dividend paying companies.  He may reconsider it in 6 months.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.680
Owned Owned
Yes

BUY

High dividend covered call strategy.  It is his favorite way to play Europe right now.  It is diversified across sectors.  For the next couple of years there will not be a lot of upside on these stocks, and then we are due for an equity market correction.  It is the best way to hold Europe for now.

E.T.F.'s

High dividend covered call strategy.  It is his favorite way to play Europe right now.  It is diversified across sectors.  For the next couple of years there will not be a lot of upside on these stocks, and then we are due for an equity market correction.  It is the best way to hold Europe for now.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.500
Owned Owned
Yes

COMMENT

Return of Capital – Good or Bad.  If you get your own money back they can boost the yield and distribution.  As new people come into the fund, they want to keep the distribution the same for everyone.  This latter kind is not a bad return of capital.

E.T.F.'s

Return of Capital – Good or Bad.  If you get your own money back they can boost the yield and distribution.  As new people come into the fund, they want to keep the distribution the same for everyone.  This latter kind is not a bad return of capital.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.500
Owned Owned
Unknown

BUY

XAW-T vs. XEF-T.  XAW-T is an all world ETF with broader exposure.  His favourite way to play international is good quality, high dividend paying stocks in Europe with a covered call overlay.  ZWE-T is his choice.

E.T.F.'s

XAW-T vs. XEF-T.  XAW-T is an all world ETF with broader exposure.  His favourite way to play international is good quality, high dividend paying stocks in Europe with a covered call overlay.  ZWE-T is his choice.

E.T.F.'s
Larry Berman CF

Chief Inve, ETF Capital Manageme...

Price Price
$21.050
Owned Owned
Yes

DON'T BUY

He likes Europe, though earnings momentum is starting to flatten compared to the U.S. Here, you own high-dividend stocks in Europe, then put a covered call and pick up some more income while it's hedged to CAD. Because has risen against CAD, you're better off owning an un-hedged version of this strategy. It's better to own the underlying security instead of a covered call like this to earn a better return. Best to own a covered call in a flat or sideways market.

E.T.F.'s

He likes Europe, though earnings momentum is starting to flatten compared to the U.S. Here, you own high-dividend stocks in Europe, then put a covered call and pick up some more income while it's hedged to CAD. Because has risen against CAD, you're better off owning an un-hedged version of this strategy. It's better to own the underlying security instead of a covered call like this to earn a better return. Best to own a covered call in a flat or sideways market.

E.T.F.'s
Stan Wong

Director &, Private Wealth Manag...

Price Price
$21.000
Owned Owned
No

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2 Comments

GerryT1

October 26th 2015 at 7:25pm

Interesting potential opportunity but I wonder:
1 - Are they writing covered calls on a large percentage of the companies in the ETF.
2 - Do they use leverage or not.
3 - Does the monthly distribution include a large percent of "Return Of Capital"

Hans Albrecht

August 26th 2016 at 4:19pm

Horizons Enhanced Income International Equity covered call ETF (HEJ) to July 31 is up 5.2% versus 0.70% for ZWE, with volatility of 15.9% versus 17.8% for ZWE. And with a better div yield of 8.3% versus 6.6%. But it is more 'worldy' than just Europe, with exposure to S.America and Asia as well as Europe.
Full disclosure: I work for Horizons


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