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Opinions Lyle Stein
iShares Cdn Financial Monthly Income ETFFIE.TOCOMMENTSep 26, 2017
Lyle SteinStock 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.
How do you get your income? A nice way to get it is to own a monthly income ETF, you have to pay a fee for that. The issue is, do you buy your bank shares directly or own a bank ETF, and pay the manager 45 or 50 basis points to have the privilege of getting monthly checks. If you don’t have a lot of capital and you still need it, then it may be a better way than buying individual bank shares.