BMO Europe High Dividend Covered Call Hedged to CAD ET | StockChase
49
BMO Europe High Dividend Covered Call Hedged to CAD ET (ZWE-T)

Last Price Recorded: $21.9400 on 2017-12-13

ON STOCKCHASE SINCE Sep 2015

E.T.F.'s
49
BMO Europe High Dividend Covered Call Hedged to CAD ET (ZWE-T)

Last Price Recorded: $21.9400 on 2017-12-13

ON STOCKCHASE SINCE Sep 2015

E.T.F.'s

BMO Europe High Dividend Covered Call Hedged to CAD ET


Signal Opinion Expert
PAST TOP PICK

(A Top Pick May 11/17. Up 0%.) He likes their exposure to Europe, and it has a Covered Call overlay. The yield is close to 5%-6%. The only trouble with Europe is that it is a political morass, so he could pull the trigger on this holding at any time.

E.T.F.'s

(A Top Pick May 11/17. Up 0%.) He likes their exposure to Europe, and it has a Covered Call overlay. The yield is close to 5%-6%. The only trouble with Europe is that it is a political morass, so he could pull the trigger on this holding at any time.

E.T.F.'s
John Hood

President & Portfolio Manager, J. C Hood Investment...

PricePrice
$21.920
Owned Owned
Yes

BUY

Europe, high dividends, CAD$ hedged.  Don’t look for another 22% return, however.  He gets some downside protection and a yield of about 5%.

E.T.F.'s

Europe, high dividends, CAD$ hedged.  Don’t look for another 22% return, however.  He gets some downside protection and a yield of about 5%.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.390
Owned Owned
_N/A

COMMENT

EUFN-N vs. ZWE-T.  EUFN-N is an interesting way to get exposure to European banks.  The risk is that the European recovery does not take hold.  It appears the world is recovering and that the banks are a good place to be, although his outlook longer term is not great on them, and so he does not recommend it.  He sees more risk than not.  Otherwise, it is a good way to play European banks.  He prefers ZWE-T for the yield and the covered calls to lower risk.

E.T.F.'s

EUFN-N vs. ZWE-T.  EUFN-N is an interesting way to get exposure to European banks.  The risk is that the European recovery does not take hold.  It appears the world is recovering and that the banks are a good place to be, although his outlook longer term is not great on them, and so he does not recommend it.  He sees more risk than not.  Otherwise, it is a good way to play European banks.  He prefers ZWE-T for the yield and the covered calls to lower risk.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.230
Owned Owned
Yes

COMMENT

ZWE-T vs. ZPH-T.  ZPH-T is the put write strategy.  If we have an acute sell off, both will lose a little money.  If you are branching outside of Canada, there is no dividend tax credit, but put write gives additional income.  He recommends having a bit of both in order to diversify.  Europe is a bit more attractive over the next couple of years.

E.T.F.'s

ZWE-T vs. ZPH-T.  ZPH-T is the put write strategy.  If we have an acute sell off, both will lose a little money.  If you are branching outside of Canada, there is no dividend tax credit, but put write gives additional income.  He recommends having a bit of both in order to diversify.  Europe is a bit more attractive over the next couple of years.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.140
Owned Owned
Unknown

BUY

European ETF.  The yield is down because the covered call premiums are low right now due to low volatility.  EUR-T is an alternative.  PRD and RPDH are alternatives also.  Europe is underperforming a little bit because the Euro is getting strong and they are exporting a lot.

E.T.F.'s

European ETF.  The yield is down because the covered call premiums are low right now due to low volatility.  EUR-T is an alternative.  PRD and RPDH are alternatives also.  Europe is underperforming a little bit because the Euro is getting strong and they are exporting a lot.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$21.550
Owned Owned
Unknown

BUY

$40,000 in a TFSA to invest in US and international equities giving protection of the principal amount? When looking at US and International ETF’s, he is not a huge fan of emerging markets. If he were doing it, he would look at VEE-T emerging-market, ZWE on Europe and the XSP on the S&P 500.

E.T.F.'s

$40,000 in a TFSA to invest in US and international equities giving protection of the principal amount? When looking at US and International ETF’s, he is not a huge fan of emerging markets. If he were doing it, he would look at VEE-T emerging-market, ZWE on Europe and the XSP on the S&P 500.

E.T.F.'s
John Hood

President & Portfolio Manager, J. C Hood Investment...

PricePrice
$22.050
Owned Owned
Unknown

COMMENT

How does Larry make a major buy of an ETF without moving the needle?  You can call up an ETF and have them facilitate a very large order, regardless of the liquidity.  They create the necessary ETF units as part of the transaction.  ETFs have the liquidity of the universe of underlying stocks. 

E.T.F.'s

How does Larry make a major buy of an ETF without moving the needle?  You can call up an ETF and have them facilitate a very large order, regardless of the liquidity.  They create the necessary ETF units as part of the transaction.  ETFs have the liquidity of the universe of underlying stocks. 

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.010
Owned Owned
Unknown

COMMENT

Continental Europe is an area he likes. He is bullish on the prospects for Germany and France, especially given that the political atmosphere has improved considerably. Rather than playing dividend oriented ETF’s, he tends to play broader ETF’s. When a regional market is recovering, banks tend to be the leader coming out, so he would prefer a European bank index such as iShares MSCI Europe Financial (EUFN-Q) that might be a bit more interesting. You don’t need to pay the big premium for a specialty when you can get into a wider regional area.

E.T.F.'s

Continental Europe is an area he likes. He is bullish on the prospects for Germany and France, especially given that the political atmosphere has improved considerably. Rather than playing dividend oriented ETF’s, he tends to play broader ETF’s. When a regional market is recovering, banks tend to be the leader coming out, so he would prefer a European bank index such as iShares MSCI Europe Financial (EUFN-Q) that might be a bit more interesting. You don’t need to pay the big premium for a specialty when you can get into a wider regional area.

E.T.F.'s
Terry Shaunessy

Founder & Director, IndeXit...

PricePrice
$22.030
Owned Owned
Unknown

TOP PICK

This is to diversify away a little from the US. BMO is doing the covered call on the largest European stocks and it is hedged, which is the way he wants to be in Europe. Dividend yield of about 6.6%.

E.T.F.'s

This is to diversify away a little from the US. BMO is doing the covered call on the largest European stocks and it is hedged, which is the way he wants to be in Europe. Dividend yield of about 6.6%.

E.T.F.'s
John Hood

President & Portfolio Manager, J. C Hood Investment...

PricePrice
$21.930
Owned Owned
Yes

COMMENT

With elections in Europe, what would be the outcome on this ETF? If you are a contrarian and you have some ability to withstand the risk of buying on a dip, he doesn’t believe the world is going to end, and he doesn’t think this is going to be a problematic thing for a very long time. If things take a pullback in the next day or 2, it may be an opportunity to get in.

E.T.F.'s

With elections in Europe, what would be the outcome on this ETF? If you are a contrarian and you have some ability to withstand the risk of buying on a dip, he doesn’t believe the world is going to end, and he doesn’t think this is going to be a problematic thing for a very long time. If things take a pullback in the next day or 2, it may be an opportunity to get in.

E.T.F.'s
John DeGoey

Portfolio Manager, Industrial Alliance ...

PricePrice
$22.290
Owned Owned
Unknown

COMMENT

[In a non-registered account]  The dividend stream coming off a foreign stream is fully taxed.  In registered accounts you can hold foreign holdings that would otherwise be fully taxed. 

E.T.F.'s

[In a non-registered account]  The dividend stream coming off a foreign stream is fully taxed.  In registered accounts you can hold foreign holdings that would otherwise be fully taxed. 

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.560
Owned Owned
Unknown

BUY

This is the way he is holding Europe in his global dividend strategy. A great way to get a 6%-7% yield out of Europe. The yield has gone down, because the price is gone up significantly over the last year, but it is still a great diversifier away from North American equities.

E.T.F.'s

This is the way he is holding Europe in his global dividend strategy. A great way to get a 6%-7% yield out of Europe. The yield has gone down, because the price is gone up significantly over the last year, but it is still a great diversifier away from North American equities.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.630
Owned Owned
Yes

TOP PICK

A play on Europe where he does not have to worry about the Euro or the Pound.

E.T.F.'s

A play on Europe where he does not have to worry about the Euro or the Pound.

E.T.F.'s
John Hood

President & Portfolio Manager, J. C Hood Investment...

PricePrice
$22.540
Owned Owned
No

BUY

There is always foreign tax withholdings.  You need to focus on the diversification of being in other parts of the world.  The benefits you get from diversification globally override tax considerations.  It has been a pretty clear ride up and is his favourite way to play Europe.

E.T.F.'s

There is always foreign tax withholdings.  You need to focus on the diversification of being in other parts of the world.  The benefits you get from diversification globally override tax considerations.  It has been a pretty clear ride up and is his favourite way to play Europe.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.370
Owned Owned
Unknown

COMMENT

Europe covered call.  Its biggest weighting is France and it sold off in recent weeks and then today is on new highs.  This is the safeness way to play Europe.

E.T.F.'s

Europe covered call.  Its biggest weighting is France and it sold off in recent weeks and then today is on new highs.  This is the safeness way to play Europe.

E.T.F.'s
Larry Berman CFA, CMT, CTA

Chief Investment Officer, Partner, ETF Capital Manageme...

PricePrice
$22.060
Owned Owned
Yes

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2 Comments

GerryT1

October 26th 2015 at 4:25pm

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 1:19pm

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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