Q: I have both of the above ETF's. Thinking of selling all of ZWB and adding to ZEB . While I like the high yield of the covered calls I think there is better opportunity for capital appreciation. with ZEB. as the values of all the banks are down. This would be aa long term hold. Your thoughts .
5i Research Answer:
This is essentially a call on the sector, of course. ZWB will do better in a flat market, and decline slightly less in a down market. ZEB will do better in a rally. Considering valuation, dividend increases (many last week) and the possibility that the US banking crisis is over, we do think the sector is more likely to rally from current depressed levels. We would be OK with such a switch.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWB.