BMO Covered Call Canadian Banks ETF - ZWB

ETF Overview

The fund has been designed to provide exposure to a portfolio of Canadian banks while earning call option premiums.

The Fund invests in securities of Canadian banks, and dynamically writes covered call options.

The call options are written out of the money and selected based on analyzing the option's implied volatility. The option premium provides limited downside protection.

The underlying portfolio is rebalanced and reconstituted semi-annually in June and December, and options are rolled forward upon expiry.

In addition, as ZWB is a fund of fund, the management fees charged are reduced by those accrued in the underlying funds.

Key ETF Data

Fundamentals
Category (main)	Active Canadian Equity Income (large cap) and Covered Calls: Banking Sector
Category (other)	Active Equity & Covered Call - Banking Sector
Underlying Index	No Index
ETF Structure	Active management. No index
Asset Class	Equity Income (large cap) and Options (Covered Calls) - Banking Sector
Region	Canada
Issuer	BMO
ETF Home Page	Available here

Fund Facts
Inception Date	Jan 28, 2011
Total Holdings	26
Distribution Frequency	Monthly
Leverage	None
Significant Currency Exposure	No
Currency Hedging	Not applicable

Fees
Management Fee	0.65%
Management Expense Ratio (MER)	0.72%

Trading Information
Ticker	ZWB
Exchange	TSX (Toronto Stock Exchange)
Currency	CAD

Eligibility
Eligibility *	RRSP, RRIF, RESP, TFSA, DPSP, RDSP
DRIP available **	Yes
PACC Plan available **	Unknown
SWP available **	Unknown

* Always check eligibility with your plan operator as plans and accounts can differ

** Not all brokers can facilitate these plans. Check with your broker.

Current Price, Fund Performance, Yield, NAV, Charts etc

To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:

ETF Analysis

Covered Call Strategy ETFs typically have a dual strategy: they try to replicate the returns of an index, and sell covered call options on some/all of their holdings.

The upside of selling covered call options is that the fund earns a premium for each option sold. The downside is that the upside potential of the ETF is limited due to the covered call option selling.

Before buying an ETF that uses a covered call strategy ensure you understand how such strategies work, and are comfortable with its advantages, risks and limitations.

Options are a somewhat complex financial instrument. They are relatively easy for some investors to understand, difficult for others. Since Covered Call Strategy ETFs use options, it would be wise to understand how they work before investing in any Covered Call Strategy ETFs.

Also understand the amount (if any) of Return of Capital the fund may pay out with distributions. ROC payments reduce your holding's capital.