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  5. ZWU: Do you have any insight into whether ZWU might increase or decrease its dividend going forward please? [BMO Covered Call Utilities ETF]
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Q: Do you have any insight into whether ZWU might increase or decrease its dividend going forward please? What factors might influence this, and if able to gauge or guess at it, what timeline might we see for a decision to update it? Thanks!
Asked by Andrew on June 05, 2025
5i Research Answer:

Utilities largely trade on earnings (which tends to be slow growth), interest rates, and sentiment (increased recently with AI demand expectations). Call option premiums will vary mostly with volatility. ZWU passes on its income to unitholders. So its income will depend on the underlying dividends of its holdings plus option premium. We would not expect much changes in the underlying dividends, though over time utilities tend to increase their dividends slowly. ZWU lowered its monthly rate in May 2023 from 8c to 7c. A spike in interest rates would likely be the most negative event. Currently we would not expect any changes in the rate. 

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWU.