Q: Regarding both BMO { ZWB, ZWU,ZWT, etc. } and Hamilton { HMAX, UMAX, FMAX, etc. } covered call ETFs, do either use a return "of" capital as part of their distributed yield ? ..... If so how much and would it be a deterrent from buying them ? I have put the word "of" in quotation marks as I think it means I am getting my own money back ? ..... Thanks for your always sound advice .....
5i Research Answer:
The tax impact of ETF payouts will vary each year. But certainly one can assume some return of capital on these. ZWB, for example, had 75% of its distribution classified as return of capital last year. ZWU was 49%. HMAX was 84%. Hamilton's break down is here.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWB.