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Opinions Larry Berman CFA, CMT, CTA
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTJul 10, 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%.
How does Larry make a major buy of an ETF without moving the needle? You can call up an ETF and have them facilitate a very large order, regardless of the liquidity. They create the necessary ETF units as part of the transaction. ETFs have the liquidity of the universe of underlying stocks.