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Opinions Terry Shaunessy
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTJul 05, 2017
Terry ShaunessyStock 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%.
Continental Europe is an area he likes. He is bullish on the prospects for Germany and France, especially given that the political atmosphere has improved considerably. Rather than playing dividend oriented ETF’s, he tends to play broader ETF’s. When a regional market is recovering, banks tend to be the leader coming out, so he would prefer a European bank index such as iShares MSCI Europe Financial (EUFN-Q) that might be a bit more interesting. You don’t need to pay the big premium for a specialty when you can get into a wider regional area.