BMO Covered Call Canadian Banks ETF (ZWB.TO)

Bank of Montréal (BMO-T), BMO Covered Call Cdn Banks (ZWB-T) or US banks? Likes Cdn banks better than US banks. Our banks are solidly better quality right across the board. Banks have been weak lately and the index has pulled back to a major support.

Mitigating risk on the Canadian banking sector. Only half is covered calls.

If you are bullish on banks play ZEB-T. If you want higher yield then ZWB is the way to play it. Canadian banks should come back a couple of percent.

Likes it. Covered Call Banks is a good counterpoint to Equal Weight Banks.

A bank ETF, but they write options against all 6 of the Canadian banks so you get a better return on the premiums from them. If you look at the quoted yield, it is probably around 5.5% but you really can’t believe that because it is based upon an equity which is going to go up and down. A very good way of boosting your income portfolio.

If you want to be in banks because of the dividends, because this enhances the returns while you wait for the correction. When banks stop pulling back then get back in with ZEB-T. A decent time to do this.

Banks – Do you buy them individually or the ETF. His view is that his job is to decide which companies to be a shareholder in and he chooses TD, which he owns.

This or buy individual banks? This has a higher yield than any of the individual banks, even after the MER. This is the covered call writing strategy. They are going to own the banks, write covered calls and collect premiums from them. Risk to this is that as the banks continue to move up, those options will be called and you’ll miss out on some of the upside. Over the last year, it probably would’ve returned about 9%-10% but if you look at some of the bank stocks, you would’ve returned even better. Royal Bank (RY-T) would have returned about 16% over that same period of time plus the dividend. He would rather choose and pick banks he likes. (He owns Royal Bank (RY-T), Bank of Montréal (BOM-T) and National Bank (NA-T).)

This has done very, very well. The Covered Call may be giving up a bit on the upside but you are also reducing the downside but are still getting a diversified exposure to the entire Canadian banking sector. If you wanted to cycle into the US, he would agree. (See Top Picks.)

Only 50% are hedged with Covered Calls and the rest are long positions. Great product for really boosting the income on some of the bank stocks.

Covered calls on all 6 banks. They have the ZEB and then there are options. The return is better on this than on all the banks. Great way to be in the game of covered calls on dividend stocks. When you see a 6.5% yield don't assume you get that. There is volatility.

Loves call options. Covered call options worked really well in a trendless trading range market, nothing too high and nothing too low. Equity options have a real good place in portfolios. Thinks Cdn banks are overvalued relative to US banks. At these prices, there is a real value here. More money available for dividend increases. Would prefer iUnits S&P Financial (XFN-T).

A very good way of having covered calls on Canadian banks.