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Opinions Mike S. Newton, CIM FCSI
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTSep 12, 2016
Stock 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%.
Hedged to the Cdn$ and also does the Covered Call Writing which a lot of people are attracted to. Covered Calls will sort of cap your upside on the growth of the actual underlying, but can generate a pretty decent additional yield by capturing a bit of those option premiums. The more moving parts in something, the less he is attracted to it. He prefers the simple.