David CockfieldBMO Covered Call Utilities ETFZWU.TOCOMMENTDec 20, 2019

Defensive stock with excellent yield (~7-8%). Would recommend buying on stock price lows. Not a growth company, so don't expect major capital appreciation. On flip side, would recommend trimming on peaks. 

Higher volatility option for a low volatility underlying asset(utilities). Nice enhancement option, but would recommend small position. 

Good option for investors worried about recession. Defensive name with reliable dividends. Won't be hit as hard. Also, falling interest rates good these companies. 

Nice income on this strategy. Yields about 8.25%. Interest rates are starting to steady and potentially pivot lower. As rates start to move lower, some of these dividend stocks, like pipelines or telecoms or banks, will look very attractive as they start to recover.

If you don't need the income, he prefers the underlying securities. Covered calls mean you lose out on some upside. Plus, these ETFs tend to charge higher expense ratios.

Dividend stocks should start to recover a bit once the 10 year bond yields start to back down. This ETF has a return of 5.6% so you can hold for when rates start to come down.
Also part of the question was on covered call strategies. Unless the underlying security is flat or falling you may see some under-performance related to the security itself

Likes stock at $10 or $11 (better value). Good for yield seeking investors. Underlying assets very safe. Good time to buy. 

8%+ dividend yield due to covered calls. When rates start turning down, these names will benefit and move higher. 71 bps, more expensive than average. Great for income, nice payment as you wait for the turnaround.

With the ROC component, the after-tax yield compares very well to alternatives, but it is hard to say whether it fully compensates, as investors have different tax brackets. If we look shorter term, its five year return is better, at 3.1%. But over ten years, it is down 26%, but with distributions 10-year net is 4.08%. Considering the very weak performance of the last year as interest rates spiked, we would still consider this 'OK' all things considered. 
Unlock Premium - Try 5i Free

Owns full position in this stock.
Good time to buy given current price.
Lots of value with industry fundamentals.

Generally, utilities are a safe investment.
Rising rate environment will negatively impact utilities.
If rates are cut, utilities will perform better.
Income is fairly safe within utility sector. 

Not sure why in this particular case, but it could be because the premiums from the covered calls were not as good. Or it could be that the prices of some of these utilities have gone up. 

You buy this for yield. Utilities are very susceptible to changes in yield. They pay high yields, but it can come back and bite you. This is a pretty solid performer, and the covered calls give a really good boost. He's very much in favour of covered calls.

Utilities are a safe-haven asset with stable, government-set revenues. But the challenge is that during high inflation, these stocks are like a long-duration bond. So, when rates rise, these stocks struggle. ZUT is BMO's equal-weight utilities ETF without calls, but that outperformed ZWU in recent years. Don't be fooled by the covered calls, which outperform in sideways or down markets, but less so in better markets. Utilities at 20-30% of a portfolio--be cautious. If you're bearish, seek utilities. If bullish, maybe not.

Defensive name with safe dividend yield.
Won't get large capital gains.
ZUT better option - doesn't write covered calls.