BMO Covered Call Utilities ETF (ZWU.TO) Buy,…

BMO Covered Call Utilities ETF (ZWU.TO)

11.95

+0.03 (0.21%)

as of Jun 19, 2026, 7:53:03 pm Market Open.

251 watching

BUY

Note that these aren't your typical utilities, but also pipelines like TransCanada, BCE and Verizon. Holds defensive, dividend players. Pays a 7.5% dividend yield. Holds safe, low-beta names. Likes it. It has performed well, down less than 1% YTD in today's market.

BUY ON WEAKNESS

Good for dividend portfolio? Love it. Don't own it right now to reduce exposure to energy and pipelines. 13 / 12.5 area really attractive. If you need the dividend, no reason to sell it now.

BUY

Yield is really high, around 7%. Remember that, for utilities, because prices are regulated by government, they can't respond as well to rate increases, and so they tend to underperform markets. When you put a covered call overlay on them, it reduces the upside a bit, but half of it is not covered.

COMMENT

Holds non-traditional utilities like Canadian pipelines, plus BCE and Telus, Verizon, US pipelines. Covered call can boost income up to 7% here. When markets move higher, covered calls lag. Does really well in a flattish market, compared to owning the underlying securities. Good for people who want income, not necessarily looking for the capital gain.

BUY

A way to extract yield from the markets without too much risk. Has always recommended for income.

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Curated by Allan Tong since 2019.
99+ opinions with 4.15 rating.

TOP PICK

The BMO Covered Calls Utilities ETF, pays a big 7.52% dividend and charges a 0.71% MER. The biggest holdings are ZUT, the BMO Equal Weight Utilities ETF, Enbridge, TC Energy, Pembima and Fortis. Those with ESG concerns, take note that these are pipeline names. ZWU also holds telcos, including Rogers, BCE and Telus. Both classes of stocks are solid dividend payers. All Canadian. ZWU is fairly liquid, averaging 377,000 shares daily.

BUY

Utilities, pipelines, telecoms. Very nice dividend of around 7.6% with the covered call. YTD, down only 1.24%, which is not bad. Good name for income, not a ton of capital appreciation.

WAIT

Based on utilities. In a rising rate environment, because they're heavily regulated, they can't just go out and change rates on their own. So these could take a bit of a hit. You might want to wait a couple of weeks to see what the first real interest rate increases are going to be and buying it then. Yield is really good. In general, a good ETF.

BUY ON WEAKNESS

Has traditional utilities, pipeline and telcos. All good dividends with high covered call exposure with a yield of 7%. Would not add here. Wait until it comes down. Some interest rate sensitivity but a solid yielder. Have to be mindful of oil prices for the pipeline and interest rates.

BUY ON WEAKNESS

Trimmed it around $13. Loves it for the yield principles and stability over time. It is sensitive to interest rates and energy. These two are in play right now. Would trade around with it. If it dips, would add to it. At $13, it is richly valued. Need to know if you want to own it for distributions or to trade.

DON'T BUY

it's underperformed the bank ETF since inception. So, the covered call isn't adding value, but rather generating fees.

DON'T BUY

FSZ vs. ZWU Both pay around an 8% dividend, which at that level it's probably not pure dividend you're getting on a long-term basis. About 6.5% is the limit for a sustainable dividend level. Plus, you get worries about the future of hydrocarbon demand. He himself doesn't see this, but it's a scenario to consider. Both FSZ and ZWU, you're getting some of your capital back to fund their dividends--this is not sustainable. ZWU has underperformed the equal-weight bank ETF since inception. So, the covered call portion isn't adding value, but is an additional-fee generator. He's rather buy the underlying stocks. Fiera has done a ton of purchases, not all of them cheap or good. Their wealth management business has been positive in the last 18 months, but you risk a market correction and a major re-pricing of assets, more so than any Canadian bank.

BUY

ZWU vs. ZWE Includes telecoms, pipelines, and electric companies as well as utilities. Good for conservative investor, who wants a nice yield of tax-efficient income. Very good yield about 7.5%. Longer term, you might have more growth in ZWE if you can look beyond the next 6-12 months.

COMMENT

Caller had a question on tax treatment. About 30% of the dividend stream comes from US corporations. This would see withholding tax. The capital gains coming from the covered calls are cap gains, and the dividends from Canadian companies will see beneficial tax treatment and the US dividend will be taxed.

DON'T BUY

For the long term The only problem is that utility stocks rely on government contracts, so are vulnerable to an increase in interest rates; they can't adjust quickly. So, if rates rise, utilities will decline even though the dividends now look attractive.

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