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Opinions Mike S. Newton, CIM FCSI
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTFeb 27, 2017
Mike S. Newton, CIM FCSIStock 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%.
Likes the European space and has been cautiously moving into it. There are a lot of events on the horizon. The covered call writing gives this about a 6.75% yield. He would be more inclined to go directly without having a covered call strategy on top. You would probably get more torque and upside here by not using the covered call strategy. Not using covered calls brings down the costs.