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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: In reference to Paul's question yesterday. That ZWU from 2017 to 2021 of that nice dividend 1/2 to 1/3 was a return of my own capital, Considering that, I'm surprised that 5I has recommended ZWU. What I thought was a very nice dividend is not. Now I'm wondering how many other covered call stocks are doing the same? The underlying stocks don't give a return of capital, right. Next I'm going to find out there is no Santa.

Read Answer Asked by Brian on January 19, 2023

Q: A portion of my portfolio is invested in the BMO Covered Call ETF's. In their fund prospectus, they indicate that a portion of your return is a return of capital. Is this a return of invested capital or is this the return of the premiums collected from writing the calls against the underlying securities?

Read Answer Asked by Michael on January 17, 2023

Q: I need to add income equities to the TFSA as the income target is underwater. With this, I'm pondering adding BMO Covered Call Canadian Banks ETF(ZWB-T) to the TFSA for extra income, rather than say ENB that I would prefer to hold in a trading account and also rather than hold a small capitalization stock like AW.UN. What do you say about this option, ZWB for a mate over the age of 71?
If you are aligned with this approach, are there other Covered Call ETFs that you would suggest from my consideration?
Many thanks for the hints!!!......Tom

Read Answer Asked by Tom on January 10, 2023

Q: Hello, I'm recently retired. I am seeking income generating vehicles for my various, registered plans (RRSP, LIRA, TFSA) to invest in. I'm considering an investment in ZWU. I'm wondering if there might be a similar, utilities based, covered call, ETF available for the American market?

Lastly, if any of these ETFs might also be available without the covered call overlay and if you believe that those versions of the ETFs might provide better, mid-term probability of a greater Total Return; I'd be interested in your opinion, as well.

Thank you!

Read Answer Asked by Richard on November 29, 2022

Q: Hello 5i
In one of the recent questions it was said that you do not like covered call etf’s. I didn’t know that was the case. Maybe it isn’t, even i don’t know. I have concentrated my covered calls on American companies that i own. Also many uncovered puts. I have concentrated on the US because the premiums are much higher than on Canadian stocks. I have quite a few Canadian stocks, however. And i hate to see them languishing and unproductive. I have therefore been thinking of a way to make some money on them. The premiums are so low that it doesn’t seem to be worth the effort. But, covered call etf’s would be easier. I don’t know much about them, however. I wonder whether you might provide some information and some pros and cons. Whether you like the idea or not.
Thanks for the excellent service.

Read Answer Asked by joseph on November 24, 2022

Q: Could you please recommend at least three Canadian products (stocks, etfs, bonds, whatever) that have an annual yield of at least 6%, but are ‘lower risk’. If you could list them in order of least risky to most that would be greatly appreciated. Thank you.

Read Answer Asked by Toge on November 24, 2022

Q: I have the above ETF,s in my TFSA in roughly equal weights along with a number of stocks. Is there sugnifcat any over lap here? Where would add first or all equaly? I know your not a fan of covered call ETSs. Any suggested changes or additions?

Read Answer Asked by Henry on November 23, 2022

Q: I am a vlaue investor, 76 years old, good pension. 43 stocks, 16 ETF's including the above covered call ETF's. I do have some growth holdings (IWO, LNF, WSP).All are doing well except ZIM and SYZ (not worried). My question is the covered call holdings are 10% of my portfolio. Is 10% too much? I do enjoy the $650 a month dividends which have been consistent for the past five months.
Thank you

Read Answer Asked by STANLEY on September 07, 2022

Q: Howdy 5i,

My small business has a corporate investment account with funds sitting in cash that I'd like to invest for the next 1 to 3 years. GICs are not an option as I need liquidity if/when recession arrives. Do you have recommendations for relatively stable ETFs/SPDRs with high dividends?


Read Answer Asked by Garth on August 22, 2022

Q: I have the above in my TFSA along with 5 individual stocks currently.
Any gapes or duplication in the ETFs, Should I just add to each equally with any new contributions to an approx 10-12 % weighting for all and thereafter considerate on individual stocks for more growth torque.

Read Answer Asked by Henry on June 17, 2022

Q: Could I get your favourite enhanced income etfs for a registered and non registered account

Read Answer Asked by Terry on April 23, 2022

Q: Hello,

I own the whole list (weights 1% to 2%) thinking I was being diversified but maybe went too far.

1) I am on the right track to reduce to about 3 names?
2) Which names optimise income?
3) Alternative names that I might have missed?

Many thanks!

Read Answer Asked by Arzoo on April 22, 2022

Q: Hi, looking to start one or two Canadian based etf. Retired, no investment out of Canada. I think I should have some. Would like monthly income, 4%+ ,moderate risk, some growth if possible.
I think Cyh is the only one with a little growth?
Could you suggest two etf’s you prefer, or suggest two from above you might have confidence in.

Read Answer Asked by Brad on March 28, 2022

Q: HI!
In an income seeking portfolio, if one has a portfolio that is overweight financials, do you think it makes sense in the current environment to lighten up and add to pipelines and utilities due to the geopolitical events and risk of recession down the road. Thought in rate rising environment assets that benefit from rising rates were in favour but it seems telcos, utilities, and pipelines are moving more now. Obviously with price of oil, increase in pipelines is understandable and clearly yield curve is playing a role. What are your thoughts on whether increasing rates will eventually hurt utilities/pipelines. Thank you!

Read Answer Asked by Neil on March 08, 2022

Q: I hold 13% of my non-registered account in energy and utilities, spread across the following stocks, with a focus on long-term income.

Would you suggest any consolidations or removal of any of these positions?

AQN, 9.70% of total, 3% gain
CU, 4.78% of total, 3% gain
ENB, 21.43% of total, 31% gain
EPD, 7.50% of total, 2% gain
FTS, 8.14% of total, 1% gain
KMI, 7.54% of total, 6% gain
PXT, 7.19% of total, 15% gain
SPB, 8.48% of total, 3% loss
TPZ, 4.19% of total, 8% gain
TRP, 4.86% of total, 11% gain
WMB, 4.63% of total, 10% gain
ZWU, 11.55% of total, flat

Thanks as always for your excellent work! Aaron

Read Answer Asked by Aaron on March 02, 2022

Q: My wife has $75,000 to invest in her TFSA, in which she is also holding 100 shares of TD Bank along with 100 shares of TD in an RSP. She is retiring in a month has a defined pension plan, CPP, OAS. But she is still looking for dividend income either monthly or quarterly to supplement her income.
We are looking at going with "Beating the TSX Portfolio 2022" but also looking at ZWU and ZWC which look like they could bring in more income but higher fees. What are your thoughts? Thank you.

Read Answer Asked by Brian on February 16, 2022