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Opinions Larry Berman CFA, CMT, CTA
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOBUYMay 08, 2017
Larry Berman CFA, CMT, CTAStock 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%.
There is always foreign tax withholdings. You need to focus on the diversification of being in other parts of the world. The benefits you get from diversification globally override tax considerations. It has been a pretty clear ride up and is his favourite way to play Europe.