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BMO Europe High Dividend Covered Call Hedged to CAD ETF - ZWE

ETF Overview

The fund has been designed to provide exposure to a dividend focused portfolio, while earning call option premiums. The underlying portfolio is yield-weighted and broadly diversified across sectors.

The fund screens for securities for dividend growth, sustainability, and option liquidity.

The fund also dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option's available premium. The option premium provides limited downside protection.

The foreign currency exposure is hedged back to the Canadian dollar.

Key ETF Data

Fundamentals
Category (main) Active European Equity Income and Covered Calls
Category (other)Active Equity & Covered Calls
Underlying Index No Index
ETF Structure Active management. No index
Asset Class Equity Income and Options (Covered Calls)
Region Europe
Issuer BMO
ETF Home Page Available here
Fund Facts
Inception Date Sept 2, 2015
Total Holdings 65
Distribution Frequency Monthly
Leverage None
Significant Currency Exposure Yes
Currency Hedging Yes
Fees
Management Fee 0.65%
Management Expense Ratio (MER) 0.71%
Trading Information
Ticker ZWE
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 at TMX ETF at Morningstar

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.