E265 – A Deep Dive on Covered Call ETFs

In this episode, Jonathan Lau, Olivia Li, and host, Skye Collyer, take a deep dive into covered call ETFs—discussing how they work and strategies to utilize them for portfolio positioning in today’s marketplace.

 Skye Collyer is a Director of ETF Distribution at BMO Global Asset anagement (BMO GAM). She is joined by Jonathan Lau and Olivia Li, Portfolio Managers at BMO Exchange Traded Funds. Recorded live on Tues, April 15, 2025.

 

ETFs:

• BMO Covered Call Canadian Banks ETF (ZWB)
• BMO Covered Call Technology ETF (ZWT)
• BMO Equal Weight Banks Index ETF (Ticker: ZEB)
• BMO Covered Call Utilities ETF (Ticker: ZWU)
• BMO Europe High Dividend Covered Call Hedged to CAD ETF (ZWE)
• BMO Canadian High Dividend Covered Call ETF (ZWC)
• BMO US High Dividend Covered Call ETF (ZWH)
• BMO Europe High Dividend Covered Call ETF (ZWP)

 

Total returns, as of 2025/03/31:

 

ZWB: 1 yr: 9.51%, 3yr: 2.27%, 5 yr 13.07%, 10 yr: 7.84%, SI: 8.13%

ZEB: 1 yr: 13.57%, 3yr: 5.17%, 5 yr 17.45%, 10 yr: 10.96%, SI: 11.27%

ZWU: 1 yr: 18.89%, 3yr: 1.98%, 5 yr 7.92%, 10 yr: 4.29%, SI: 4.92%

ZWP: 1 yr: 12.62%, 3yr: 13.20%, 5 yr 12.41%, SI: 6.61%

 

Annualized distribution yield, as of 2025/04/23:

 

ZWB: 7.05%

ZEB: 4.20%

ZWU: 7.65%

ZWP: 6.87%

ZWU, Utilities about 56%, as of April 15, 2025. Allocations subject to change without notice.

#1 Canadian covered call provider by assets under management, National Bank Report, Jan 3, 2025.

BMO ETFs has 195 tickers, BMO GAM, as of Dec 31, 2024.

BMO ETFs launched the first covered call in Canada in 2011.

 

Strike price: is the price at which the underlying security can be either boughtor sold once exercised.

Out-of-the-money: