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Opinions Larry Berman CFA, CMT, CTA
BMO Europe High Dividend Covered Call Hedged to CAD ETZWE.TOCOMMENTOct 23, 2017
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%.
EUFN-N vs. ZWE-T. EUFN-N is an interesting way to get exposure to European banks. The risk is that the European recovery does not take hold. It appears the world is recovering and that the banks are a good place to be, although his outlook longer term is not great on them, and so he does not recommend it. He sees more risk than not. Otherwise, it is a good way to play European banks. He prefers ZWE-T for the yield and the covered calls to lower risk.