Covered Call ETF

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Hello!

I recently came across the BMO Covered Call US Banks ETF (ZWK.TO) and I’m wondering about the pro’s and con’s of an ETF like this. I have seen your views on split corps and income funds like Canoe (EIT-UN.TO), but does this type of ETF have the same red flags as those?

Thanks!

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Asked on April 14, 2021 12:18 am
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Another good option with Canadian dividend companies is
BMO Canadian High Dividend Covered Call ETF (ZWC). Still recovering to pre-covid levels with some room to grow and pays a decent yield. (6.88%)

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Posted by Jason Chong
Answered on April 17, 2021 3:37 pm
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Hey there! So, I've actually never done a video on split corps. I've done one on covered calls however.

https://www.youtube.com/watch?v=VyUw9zzChPk

That video is going to be completely relevant to ZWK.

Keep in mind, these ETFs don't have "red flags" per se. You just need to know what you own, before you own it. Lots skip that part! Covered call ETFs are GREAT for passive income streams, as they often yield higher, and pay on a monthly basis. But you will sacrifice overall returns in a bull market for this.

Have a watch of that video, and it's going to shine a light on the products and you can decide if they're right for you, or head back here and ask more questions!

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Posted by Dan Kent
Answered on April 14, 2021 1:05 pm
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