Q: Peter; If I own various oil and gas/ tech stocks does it make sense to buy a covered call ETF, i.e., the BMO ZWT and the Horizon ENCC , to hedge ? Thanks.
Rod.
Rod.
5i Research Answer:
Covered call funds will still move in the same general direction as their underlying sectors. In a rally, they will do OK, with higher income. In a correction, they will still fall, but less so (a bit) because of the options premium. But other than income, we would not consider them good hedges against existing sector positions.