Q: Hello,
A new ETF from BMO: BMO Covered Call spread Gold Bullion ETF Methodology (ZWGD). Any thoughts? Still too early to judge?
Thanks
Dave
A new ETF from BMO: BMO Covered Call spread Gold Bullion ETF Methodology (ZWGD). Any thoughts? Still too early to judge?
Thanks
Dave
5i Research Answer:
It is a bit too early, and asset levels are tiny right now. It has only traded for four days. Offering bullion exposure and income through covered call (CC) spreads, we imagine it will be fairly popular. Bullion of course does not pay income, but with a CC strategy investors may find it easier to hold for the long term (as income will continue regardless in the ups and down of the gold price). Fees are 0.65%. Call options will be on 50% of the portfolio and out of the money (1 or 2 month options). The 'spread' component does add a bit more upside potential vs traditional CC funds. We would consider it a decent strategy for bullion investors, but would prefer to wait a bit here.