The BMO Covered Call U.S. Banks ETF (ZWK) is professionally managed by BMO Global Asset Management. The fund has been designed to provide exposure to a portfolio of U.S. banks while earning call option premiums.
The fund invests in 38 US Banks. It’s ideal for investors looking for dividend income. The dividend yield on November 24th was 6.19%!
The fact that the fund uses call options accomplishes two things:
- increases the dividend yield;
- reduces volatility but also growth potential. So, it’s something to keep in mind.
What’s a covered call ETF?
What’s unique about this ETF is that it uses covered calls to protect against downside risk. This being said, the covered call strategy provides limited downside protection. Also, when you write a covered call, you give up some of the stock’s potential gains. These ETFs will tend to have a higher yield and a lower performance.
ZWK is an excellent option for conservative investors looking for a steady income, moderate volatility and exposure to the US banking sector.
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Historical performance
| ETF | Div Yld | |
|---|---|---|
| ZWK | 7.60% |
Historical performance updated daily
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ZWB MER
| ETF | MER* % |
| ZWK -BMO Covered Call US Banks | 0.72 |
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ZWK Stock Profile
Updated daily
ZWK Stock 52 weeks high and low
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How to choose a good dividend ETF
– Total return: Though the focus here is on the dividend yield, you have to keep in mind the total return. The profit or loss we make on any investment combines both dividend income and capital gain or loss. Looking at the long-term performance of the fund is crucial. An ETF that provides a good capital appreciation with a high dividend yield is preferable.
–Diversification: A diversified ETF is always a safer option. Some high yield ETFs are sector-specific (Financials, Energy or Gold). The ones focused on Energy and Gold have had an inferior long-term performance and carry high volatility risk.
–Volume and liquidity of the ETF. The higher the asset under management, the lower the trading costs of the ETF (difference between the bid and ask price).
ZWK Dividend history
| Distrib Period | Ex-Div Date | Pay Date | Cash Distrib Per Unit | Total Distrib Per Unit |
|---|---|---|---|---|
| January 2023 | January 27, 2023 | February 02, 2023 | 0.170000 | 0.170000 |
| February 2023 | February 24, 2023 | March 02, 2023 | 0.170000 | 0.170000 |
| March 2023 | March 29, 2023 | April 04, 2023 | 0.170000 | 0.170000 |
| April 2023 | April 26, 2023 | May 02, 2023 | – | – |
| May 2023 | May 30, 2023 | June 05, 2023 | – | – |
ZWK ETF Holdings
| Weight (%) | Name | Ticker |
|---|---|---|
| 7.56% | CITIGROUP INC | C |
| 7.31% | GOLDMAN SACHS GROUP INC/THE | GS |
| 7.30% | JPMORGAN CHASE & CO | JPM |
| 7.24% | MORGAN STANLEY | MS |
| 7.21% | BANK OF AMERICA CORP | BAC |
| 7.18% | US BANCORP | USB |
| 7.10% | WELLS FARGO & CO | WFC |
| 6.29% | TRUIST FINANCIAL CORP | TFC |
Consult issuers’ website for up-to-date data