Q: HI 5i ,
I ama DYI retired investor, looking to add a few covered call ETF's to my TFSA, do you have a favorite what are your thoughts in this realm for added dividend income?
Thanks P
I ama DYI retired investor, looking to add a few covered call ETF's to my TFSA, do you have a favorite what are your thoughts in this realm for added dividend income?
Thanks P
5i Research Answer:
We are fine with covered call strategies for investors looking for enhanced sources of income but they do have a cost in that they cap upside returns in an upward trending market. We might look at ZWB and ZWU. They offer outsized yilds on top of the underlying holdings and, being slower growth, are also less likely to 'run away' on an investor, resulting in the underlying getting called away.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWB, ZWU.