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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Comment by Michael9144on Oct 05, 2011 11:44am

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Post# 19121195

RE: RE: RE: Safety of the Distibutions

XFN and ZWB show almost identical % changes, ZWB is able to increase payments from the premiums gained by selling options against the actual stocks they hold, the premium will vary with the option Price movement, the Options Strike will vary with the market movement. The ability to maintain this high payout will depend upon the market and the option writers abilities.ZWB should be no more than 10% of investable Assets.

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