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Opinions John DeGoey
iShares Cdn Financial Monthly Income ETFFIE.TOCOMMENTMay 02, 2016
John DeGoeyStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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There are two elements to covered call strategies. There is the underlying stocks, and then the option premium. Volatility will continue to be high for the next couple years. Premiums will remain elevated. FIE pays back a part of your money back. There are a couple different elements to consider.
Larry Berman CFA, CMT, CTAIt's like XTR--the yield you seem to get is not what you're enirely getting. He'd rather do straight bond ETF or covered call one.
People buy this for the 6% yield, but the banks and high-yield companies inside this ETFs yield only half that. Where's does the rest come from? This is about a return of your own capital to goose the yield, not a return on capital. You end up with a lower adjusted cost base, so when you sell it yet get whacked with a heavier tax.
A product that pays money from a number of different ways. Canadian financials, REITs, Corporate bonds. A mixed bag of different things that are paying money. Yield is about 3.9%, but when you gross that up with some of the Return of Capital, it might be more like 7%-7.2%, etc. This is for people that want a strong income, but it is grinding down the Adjusted Cost Basis, because some of that money you are getting is Return of Capital.