BMO Covered Call Utilities ETF T.ZWU

Alternate Symbol(s): BMMVF

The ETF seeks to provide exposure to the performance of a portfolio of utilities companies to generate income and to provide long-term capital appreciation. To achieve investment objective the ETF will primarily invest in and hold the equity securities of Canadian companies widely recognized as utilities companies, which may also include telecommunication and pipeline companies, and use derivative instruments to hedge U.S. dollar securities 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.

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BMO Covered Call Utilities ETF > How sustainable is this dividend?

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Comment by DeanEdmontonon Apr 14, 2024 1:39pm

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Post# 35988281

RE:How sustainable is this dividend?

Mbuch - Take a Look at the composition of this dividend, 50% is return of capital. That is your oen money, not really a dividend. They can keep the dividend here indefinitely by continuing to raise the return of Capital amount, theoretically, it could go to 100%. This used to be a well managed covered call ETF, it hasn't been for the past couple of years. No idea why it made the Globes top ten list.

mbuch wrote:
Seems to be to high for too long in my opinion.

But am still considering adding some more shares. Should I wait to see if it gets cut and wait for the dip in share price?