How would you rate and which do you prefer.HMAX and ZWB?
Thanks so much.
The main difference here is that HMAX utilizes 'at the money' call options and ZWB utilizes 'out of the money' calls. This means HMAX offers a much higher yield (nearly double) but its positions are more at risk of being called away. Thus, in a rising market, HMAX will provide higher yield but less potential for capital gains. In a falling market, HMAX may still decline, but its higher option premium income will cushion the blow a bit more than ZWB. We would be comfortable with either, but considering the low valuation in the financial sector currently ZWB likely offers better potential currently.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWB.