zwk etf

ZWK ETF: Full review of the BMO Covered Call US Banks 

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.

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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.

Historical performance

ETFDiv
Yld
ZWK7.60%

Historical performance updated daily

Best US Dividend ETFs in Canada (2023)!

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ZWB MER

ETFMER*
%
ZWK -BMO Covered
Call US Banks 
0.72

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ZWK Stock Profile

Updated daily

ZWK Stock 52 weeks high and low

Updated daily

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).

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ZWK Dividend history

Distrib
Period
Ex-Div
Date
Pay
Date
Cash
Distrib
Per Unit
Total
Distrib
Per Unit
January 2023January 27, 2023February 02, 20230.1700000.170000
February 2023February 24, 2023March 02, 20230.1700000.170000
March 2023March 29, 2023April 04, 20230.1700000.170000
April 2023April 26, 2023May 02, 2023
May 2023May 30, 2023June 05, 2023

ZWK ETF Holdings

Weight (%)NameTicker
7.56%CITIGROUP INCC
7.31%GOLDMAN SACHS GROUP INC/THEGS
7.30%JPMORGAN CHASE & COJPM
7.24%MORGAN STANLEYMS
7.21%BANK OF AMERICA CORPBAC
7.18%US BANCORPUSB
7.10%WELLS FARGO & COWFC
6.29%TRUIST FINANCIAL CORPTFC

Consult issuers’ website for up-to-date data