BMO Covered Call DJIA Hedged to CAD ETF T.ZWA

The ETF seeks to provide exposure to the performance of a portfolio of U.S. stocks to generate income and to provide long-term capital appreciation. To achieve investment objective the ETF will primarily invest in and hold securities of the issuers included in the Dow Jones Industrial Average in the proportions in which they are reflected in the Dow Jones Industrial Average and use derivative instruments to hedge back to the Canadian dollar. 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:ZWA - Post by User

BMO Covered Call DJIA Hedged to CAD ETF

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Post by AnalyticalTraderon Feb 06, 2012 8:08pm

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Post# 19497340

5% cash + DOW titans growth

Isn't it something that I'm the first to comment on this interesting ETF? I was looking for a DOW index ETF that captures the promising growth this year while earning cash distributions on a monthly basis. Then this ETF came along late last year and has been doing very well indeed. The cash distribution from cover call is an attractive part of the deal since it makes it a 'double-edge sword,' so to speak, for year 2012. I first caught sight of it when it was at 16!! Yes I was there. It was only a month ago. Now it's at 16.49$ and raising with the US market.

And yes, it's hedged to the Canadian dollar.

My portfolio consists of a great deal of cover-call ETFs and a set of US blue-chips. ZWA might just be a secret weapon you've been looking for.

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