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BMO Covered Call Canadian Banks ETF T.ZWB

Alternate Symbol(s):  BMDLF | T.ZWB.U

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

Comment by billfox54on Jun 09, 2011 10:33pm
679 Views
Post# 18696859

RE: RE: What am I seeing?

RE: RE: What am I seeing?I didn't watch this for long enough before I bought it.  My thinking was that an etf writing calls would outperform in a sideways to down market for the banks, thus I bought.  But if you compare ZEB with ZWB on perfcharts, the two have followed each other in lock-step. It looks to me like ZWB is being managed to follow, most likely by BMO, though of course I don't know.
So, I'm out for now, while the seasonality for the banks is poor.  I think ZWB will be a great tool in a rising market, since the managed relationship will protect investors from the risk of being called on the options.  I don't see any reason to ever own ZEB. 
     GLTA    Billfox
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