BMO CDN HIGH DIV COVERED CALL ETF (ZWC.TO)…

BMO CDN HIGH DIV COVERED CALL ETF (ZWC.TO)

22.43

-0.00 (0.00%)

as of Jun 19, 2026, 7:55:01 pm Market Open.

107 watching

PARTIAL BUY

A popular ETF that gives the double-whammy of Canadian dividend stocks and writes call options on them. It's tax-efficient in a non-dividend account. It pays over a 6% yield. But this charges 72 basis points and has a covered call overlay, so you won't participate as much in a market move upwards. So, limit your investment here.

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WATCH

If markets were down 5% he would make a bigger allocation to this. You need to buy low and sell high. Once the market is down they are still writing calls. If the market then snaps back this one should underperform. Add to it after the markets have a good month.

COMMENT

ZDV vs. ZWC Both have similar stocks in them. If they're high-paying, quality stocks, the yield will support the stock price. When you write covered calls, BMO would be paying part of the dividend stocks on. Normally, a high-dividend stock is not so volatile.

BUY

This is a defensive to hold/buy for the next 12 months. High-dividend payers are in this ETF, and those stocks (i.e. BCE, Enbridge) are holding on well in this market. Yields are supporting their prices.

PARTIAL SELL

Moving to a Non-Covered Call version. The ultimate bottom/bottom is not in. If you are long term strategic, you stick with the covered call overlays. He'd be okay making a switch today.

DON'T BUY

Everyone loves the extra income from the covered calls. Remember that it will face all the market downside and cuts off the top on rallies. Be aware of a steep decline in the market as it will not participate as the market recovers, due to all the calls it has written on the way down. You end up giving away your winners and holding your losers.

COMMENT

ZPR-T vs. ZWC-T vs. ZWU-T. He likes ZWU-T and ZWC-T for the covered calls. ZPR-T is reset preferreds. They reset. There is an expectation that BOC will be less aggressive with interest rates so we are seeing pressure on these. The lower it gets the more he likes it. He feels it will appreciate next year.

COMMENT

Banks insurance and so on – high yielding stocks. Late in the cycle you will get a bit higher yield. It is limited to Canadian companies so there is no global diversification there. Sometimes it pays to have financial advice.

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WATCH

Great quality dividend paying stocks with a covered call overlay. He loves the strategy. It owns banks, energy companies and insurance companies. The TSX could fall 3-5% over the next months and that is another place to come into it.

BUY

XDV-T vs. ZWC-T. Most stocks in those two indexes are similar. ZWC-T has a covered call overlay. XDV-T is more sector concentrated. He advocates that if you are in the market late in the investment cycle you want to be in a covered call strategy. It gives you a smoother ride.

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.

DON'T BUY

He has been reducing it recently because of relative risk in Canada compared to the rest of the world. This ETF has the best dividend players in Canada. There is very low risk of cutting, and they are very likely to grow dividends. They have a covered call overlay to increase yield. There is also ZDV-T without the covered call strategy and this will give you more growth rather than yield.

DON'T BUY

Getting so popular, could they have trouble in the future consuming too much of the option market? High dividend in the last couple of years hasn’t necessary been the best strategy. Momentum and growth have been doing better. You want to be buying this strategy on flat markets. We are not seeing this.

COMMENT

You are going to find less volatility in a high dividend fund. But it can go down like anything else.

BUY

6.49% yield. You aren’t getting your own money back. It is dividends plus covered call exposure.

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