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Opinions Tyler Mordy
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTJul 22, 2016
Tyler MordyStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Likes exposure to Europe, of which many Canadians have minimal exposure. ZWE looks at the dividend yields of its holdings. Plus, it does some covered writing, which gives you income along the way in tradeoff for upside. Attractive yield, but consider also owning some European stocks on their own. Nice piece of diversification for your portfolio, good bit of income.
In general, Europe is good value compared to US or NA markets. Lower PE and book value, higher dividend. This one has high dividend stocks, with covered call overlay. Up 11% YTD. Makes sense for cashflow. But ZWP, holding underlying securities, gives better total return. Yield is around 7.5%.
BMO Europe High Dividend Covered Call Hedged to CAD (ZWE-T) or BMO US High Dividend Covered Call (ZWH-T)? He has a thesis that the US’s outperformance of the equity and currency markets is over. We have had 7 years of a structural US$ Bull market, and their equity market is expensive with headwinds on earnings. Europe has the unique situation where everybody recognizes the structural problems, but those are already priced in.