BMO Covered Call Canadian Banks ETF T.ZWB

Alternate Symbol(s): T.ZWB.U | BMDLF

The ETF seeks to provide exposure to the performance of a portfolio of Canadian banks to generate income and to provide long-term capital appreciation while mitigating downside risk through the use of covered call options. To achieve investment objective the ETF will primarily invest in and hold the securities of Canadian banks, ETFs, or a combination of these. Depending on market volatility and other factors, the ETF will write covered call options on these securities. Under such call options, the ETF will sell to the buyer of the option, for a premium, either a right to buy the security from the ETF at an exercise price or, if the option is cash settled, the right to a payment from the ETF equal to the difference between the value of the security and the exercise price.

TSX:ZWB - Post by User

BMO Covered Call Canadian Banks ETF

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Comment by Banner403on Apr 01, 2011 5:41pm

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Post# 18375570

Great conditions for Covered Calls

Market conditions are perfect for this type of alternative strategy ETF. If you think the market/ banks in particular are fully valued, this is where to put your money. Indicated distribution is above 9%, capital appreciation doing excellent as well. I'm going to add to this and several other call strategy etf's soon as I think the market is too expensive at the moment. I've also recently bought a position in HEX, it includes the biggest market cap 30 tsx companies (equal weighted) with full covered calls. I don't like to put that much money in any one stock, so these etf's are great for diversification while reaping benefits of enhanced income via cc's... good luck.

LS

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