Q: In your answer to me on the BMO and Hamilton covered call ETF's regarding " return of capital " you refer to ZWB having a return of capital of 75% and HMAX as 84% .... Your answer basically addressed taxation which in my case is inside a RRIF account...... And in a follow up question from Bruce you give a brief explanation. I don't think I understand what the term means as to me it sounds like I am getting my own money back which strikes me as a bad thing. Could 5i explain just what exactly the term means ? And whether or not it is a good thing, bad thing , or nothing to be concerned about ..... Thank you as always for your sound advice .....
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
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 .....
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Covered Call Utilities ETF (ZWU)
- BMO US High Dividend Covered Call ETF (ZWH)
- BMO Covered Call US Banks ETF (ZWK)
- Horizons Gold Producer Equity Covered Call ETF (GLCC)
Q: All different holdings, but what would be your order of preference (based on expected total return) with the next 12 months in mind. Thanks as always, great service.
Q: Which do you prefer and why?
Q: ZWB or ZEB Which would be the preferred etf to hold in a TFSA account?
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Equal Weight Banks Index ETF (ZEB)
- Hamilton Canadian Financials Yield Maximizer ETF (HMAX)
Q: Just finished reading the Money Saver's email warning " Avoiding The Yield Trap " on covered call ETF's . Where it mentions ETF's yielding in excess of 10% yet uses a BMO banking covered call as an example . I believe all the Hamilton ETF covered call products yield in that 10% or better area and in the case of the banking ETF ZWB used as an example, HMAX yields 15% which beats ZEB's 10 year return by over 5% . And that doesn't take into account the 50% of the HMAX portfolio that contains the underlying stock which should return 50% of the return on ZEB .....If ZEB over 10 years returns 9.6% then HMAX should return the annual yield of 15% plus 4.8% reflecting the 50% of the portfolio containing the underlying stock .... There will also be a small capital gain/loss reflecting the covered call side of their holdings which I have no idea how to calculate so have ignored .... Please explain how I would be missing out growth in the banking sector using the example the Money Saver used were I to purchase HMAX instead of ZWB ? 15% + 4.8% = 19.8% which doubles ZEB's return ...... Please explain the flaws in my logic. { I suspect they are there I just don't know what they are }
Also could 5i give me a list of all the Hamilton ETF products that operate like HMAX { 50% of the portfolio with the underlying securities } with an explanation of what sector they represent, their current yield in percent , and annual dividend amount { I'd like this number so I can calculate the yield on any given day while I follow them and make my decisions on whether and when to purchase }
Thanks for your great service in helping us DIY investors ......
Also could 5i give me a list of all the Hamilton ETF products that operate like HMAX { 50% of the portfolio with the underlying securities } with an explanation of what sector they represent, their current yield in percent , and annual dividend amount { I'd like this number so I can calculate the yield on any given day while I follow them and make my decisions on whether and when to purchase }
Thanks for your great service in helping us DIY investors ......
Q: I am down $3,800.00 on ZWB (15% of portfolio) and down $9,600.00 on ZWK (2% of portfolio).
What is your view on the banking sector. Do you see a full recovery or is it going to take a while? Should I hold or cut back?
What is your view on the banking sector. Do you see a full recovery or is it going to take a while? Should I hold or cut back?
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Equal Weight Banks Index ETF (ZEB)
- Horizons Equal Weight Canada Banks Index ETF (HEWB)
- RBC Canadian Bank Yield Index ETF (RBNK)
Q: For a long term hold (15 years) in a RESP, would you prefer ZEB or ZWB and provide reasons why. Also any other suggestions would be appreciated.
Q: Your thoughts about purchasing the above in my TFSA and/or RRIF accounts . Do you see any major downsides?
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Covered Call Utilities ETF (ZWU)
- Canoe EIT Income Fund (EIT.UN)
- BMO Canadian High Dividend Covered Call ETF (ZWC)
- Evolve S&P/TSX 60 Enhanced Yield Fund (ETSX)
- Hamilton Canadian Financials Yield Maximizer ETF (HMAX)
- Hamilton Utilities Yield Maximizer ETF (UMAX)
Q: I would like to put about 50% of my portfolio into safe, higher yielding (10%+) Canadian focused ETF's or Mutual Funds, and adjust my holdings as needed going forward based on sector performance. I feel that both Banks & Utilities are nearing lows and that a further correction may occur in the general market due to tax loss selling or possibly one more rate hike. Do you feel that the mix of ETF's listed provide a safe way to invest with the goals indicated? What % for each, as part of the 50%, would you recommend as a holding, and how would they be treated for tax purposes? Thanks for the great service and please use as many credits as necessary.
Q: Hi 5i,
Does Zwb pay dividend in US or canadian dollars? ....Looking at stock information using TD web broker.... it shows dividend as $1.35 US or 11.03 %....does this number seem correct to you... Where would you recommend searching for this type of info?
thx
Does Zwb pay dividend in US or canadian dollars? ....Looking at stock information using TD web broker.... it shows dividend as $1.35 US or 11.03 %....does this number seem correct to you... Where would you recommend searching for this type of info?
thx
Q: Hi team,
How would you rate and which do you prefer.HMAX and ZWB?
Thanks so much.
How would you rate and which do you prefer.HMAX and ZWB?
Thanks so much.
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Covered Call Utilities ETF (ZWU)
- BMO Canadian High Dividend Covered Call ETF (ZWC)
- Evolve Global Healthcare Enhanced Yield Fund (LIFE)
Q: Would like to get your view on ETFs that use covered call options to enhance returns. As interest rates plateau and eventually begin to fall is there anything 'in general' that we can expect from these ETFs? Will the share price increase, like bonds, to bring yields more inline with expectations or is the share price more influenced by the underlying share prices of the stocks held in the ETFs?
- BMO Covered Call Canadian Banks ETF (ZWB)
- CI U.S. & Canada Lifeco Covered Call ETF (FLI)
- BMO Canadian High Dividend Covered Call ETF (ZWC)
- Hamilton Canadian Financials Yield Maximizer ETF (HMAX)
Q: I am at a point in my life where I am looking to my investments more for income than growth. My question concerns how you might incorporate a strategy that are includes "dividend" stocks that pay a low yield. eg HD, TRI, CN etc. Assuming you wish to obtain an overall yield of 4% - 5% from your portfolio (in order to satisfy RRIF requirements while maintaining some growth) I would think it best not to load up only on high yield stocks and continue maintain a balanced portfolio. To achieve the necessary income should one invest in low dividend payers and sell a portion of the low yield dividend payers annually in order to achieve the be needed income; go a bit overweight on high yield equities in order to juice the income; or just forget about balancing the portfolio?
Any thought you have would be greatly welcomed.
Appreciate the insight.
Paul F.
Any thought you have would be greatly welcomed.
Appreciate the insight.
Paul F.
Q: What is your current view of Canadian Banks in general...seems like a decent time to add, or are you still overly concerned about rising rates and the threat of recession?
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- Lowe's Companies Inc. (LOW)
- Canadian National Railway Company (CNR)
- BCE Inc. (BCE)
- Enbridge Inc. (ENB)
- TC Energy Corporation (TRP)
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- TELUS Corporation (T)
- Restaurant Brands International Inc. (QSR)
- Capital Power Corporation (CPX)
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- Tricon Residential Inc. (TCN)
- Shopify Inc. Class A Subordinate Voting Shares (SHOP)
- A&W Revenue Royalties Income Fund (AW.UN)
- Tamarack Valley Energy Ltd. (TVE)
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Covered Call Utilities ETF (ZWU)
- Hydro One Limited (H)
- Perion Network Ltd (PERI)
- Brookfield Infrastructure Corporation Class A Exchangeable Subordinate Voting Shares (BIPC)
- Brookfield Corporation Class A Limited Voting Shares (BN)
- Brookfield Asset Management Ltd. Class A Limited Voting Shares (BAM)
- Lumine Group Inc. (LMN)
Q: If you had $20,000 to invest today for and Income with some growth investor in an otherwise well diversified portfolio, what would you pick or just add to?
Q: Hi 5I
I want to make sure I understand the effect of management fee and management expense ratio MER, on an ETFs dividend yield.
For example looking at ZWB the indicated dividend yield on my brokers site is listed as
Div - 7.64%,
MER -0.72 %
Mgt fee - 0.065 %
Is the stated dividend 7.64% the amount received after all expenses are paid or do you subtract the fees to get the actual dividend received?
thx
I want to make sure I understand the effect of management fee and management expense ratio MER, on an ETFs dividend yield.
For example looking at ZWB the indicated dividend yield on my brokers site is listed as
Div - 7.64%,
MER -0.72 %
Mgt fee - 0.065 %
Is the stated dividend 7.64% the amount received after all expenses are paid or do you subtract the fees to get the actual dividend received?
thx
- iShares S&P/TSX Canadian Preferred Share Index ETF (CPD)
- BMO Covered Call Canadian Banks ETF (ZWB)
- BMO Equal Weight US Banks Index ETF (ZBK)
- BMO Equal Weight Utilities Index ETF (ZUT)
- BMO MSCI Emerging Markets Index ETF (ZEM)
- iShares Core Canadian Universe Bond Index ETF (XBB)
- iShares Core Canadian Long Term Bond Index ETF (XLB)
- iShares S&P/TSX Capped Energy Index ETF (XEG)
- iShares S&P/TSX Capped REIT Index ETF (XRE)
- iShares S&P/TSX Global Base Metals Index ETF (XBM)
- iShares U.S. Small Cap Index ETF (CAD-Hedged) (XSU)
Q: I listed in descending order securities that under performed since their 2022 highs. Please rank the securities in order of the best chance to recover their losses when we get back to the risk on mode. Thank you
Q: Hello,
What are your 2 favorite covered call etfs and why? Do you generally recommend them for the average investor?
What are your 2 favorite covered call etfs and why? Do you generally recommend them for the average investor?
Q: In ref. to TK's question July 10 I am curious why you would suggest ZWB over HMAX for an income-based portfolio? I looked hard at both, for the same reason as TK, and chose HMAX. Just counterchecking my decision. Thanks, James