-
BMO Canadian High Dividend Covered Call ETF (ZWC)
-
Hamilton Canadian Financials YIELD MAXIMIZER TM ETF (HMAX)
Q: I have been building a portfolio with ETFs.
ZWC (10.3%) & HMAX (4.97%) makes up the Canadian Income Equity Sector (15.3%)
I am 77 years of age and only interested in Dividends, Interest and Distributions. I have 9 sectors I will present each over the next 2 weeks. Please comment on the 2 ETFs in this sector.
Thank You, Jim
ZWC (10.3%) & HMAX (4.97%) makes up the Canadian Income Equity Sector (15.3%)
I am 77 years of age and only interested in Dividends, Interest and Distributions. I have 9 sectors I will present each over the next 2 weeks. Please comment on the 2 ETFs in this sector.
Thank You, Jim
5i Research Answer:
ZWC is a solid, large ($1.6B) high dividend covered call fund. Fees 0.72%, yield 6.64%, five year annualized return 12.03%. For conservative investors seeking enhanced income, we think it is fine, as long as investors understand that performance will lag in a big market rally. But we would be quite comfortable holding it.
HMAX is similar size and fees (0.80%) and has a shorter history. One year is 17.37%. Yield is higher at 14.11% because it sells in-the-money options. This enhances income, but will limit gains in a rally even more. But the higher income offers slightly more protection in a market decline. Again, we would be quite comfortable here for investors seeking income and financial sector exposure.