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

He likes it and other covered calls on the banks and some of the others in the US. He doesn’t have much faith in Ottawa these days. He thinks policies are ill conceived. We seem to be in the direction of greater regulation and greater taxation. He sees companies retracting from Canada.

Covered call high dividend ETF. The volatility is picking up so this is not a bad place to be because of the covered calls earning bigger premiums. It has come back to its September lows.

The dividend paying stocks average about 4% in dividends. The premium above that is coming from the covered call strategy and there is no return of capital in that model. There are capital distributions from mergers and acquisitions only. There is a high correlation to financials in Canada. It is kind of like the weighting of the TSX.

BMO Canadian High Dividend Covered Call (ZWC-T) or BMO Canadian Dividend (ZDV-T) for a TFSA? This is a broad based diversified fund that writes covered calls against the securities in the fund. It gives you the dividends plus the premiums from the options on top of that. Interest rates are probably going higher, but doesn’t expect it to happen this year. Wouldn’t be surprised to see a couple of hikes next year. He would be inclined to go with this one, because you’re getting 2 sources of income. You could actually own both and be fine.

A new product and is on the whole Canadian Index. Has a very high yield. Currently 6.2%. An attractive product.

BMO high dividend or BMO Europe high dividend? He loves these and uses them in his fund. When you want to play defence, a high dividend concentration in stocks, tend to have lower downside risk. If you do this with a Covered Call, you get an enhancement on your yield. This one has close to a 6% yield, not a bad way to play Canada.