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BMO Covered Call Utilities ETF (ZWU $11.17)
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BMO Europe High Dividend Covered Call Hedged to CAD ETF (ZWE $20.10)
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BMO High Yield US Corporate Bond Index ETF (ZJK $18.71)
How will this affect the dividends to ETF with some US exposures? Are Rsp totally exempted ?
How could such a move jeopardize the U.S. economy,
Did diverting some fund to. ZWE or other alternative could represent a good defensive move.
It is a fluid situation and nothing has been passed yet. We expect changes, and Canada has not been specifically mentioned (though likely will be included in any changes). Witholding taxes could actually go to 50% (5% more each year). RRSPs should be exempted but it is unclear for sure. Certainly such moves would see capital flow out of the US, and thus will likely be modified or not get passed at all. With this move (and tariffs) Europe has seen a lot of new money flows, and we think owning some ZWE for diversity makes a lot of sense for investors seeking enhanced income. ZWE is a covered call fund so upside could be less in a big rally.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWU.