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

BMO Covered Call Canadian Banks ETF

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Post by ttibsenon Oct 04, 2011 11:30am

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Post# 19116610

Safety of the Distibutions

Has ZWB consistently paid out about 10% in monthly distributions since its inception?
Can we be confident that the 10% rate will be maintained for the near term (1- 2 years) future?
If the answer to both of the above is yes, then why isn't the entire world piled into ZWB? There is nothing out there that comes close to this sort of yield so I am left wondering what the catch is?

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