BMO’s New Enhanced Income Sector ETFs
ZWEN – BMO Covered Call Energy ETF & ZWHC – BMO Covered Call Health Care ETF
Apr. 4, 2023ZWEN – BMO Covered Call Energy ETF provides exposure to large cap energy companies, benefitting from increased commodity prices and forecasted increases in global energy consumption for 20231 while also providing consistent distributions through dividends and covered call writing.
Key Facts:
- Exposure to a basket of North American listed energy companies
- Equal weighted exposure
- Covered call overlay implementation for income generation writing short-dated out of the money call options on approximately 50% of the portfolio
- Distribution Frequency: Monthly
- Risk rating: High
- Management Fee: 0.65%
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Portfolio Construction Process
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ZWHC – BMO Covered Call Health Care ETF provides exposure to American listed healthcare companies, benefitting from an increase in demand for healthcare services as the United State’s population ages while also providing consistent distributions through dividends and covered call writing.
Key Facts:
- Exposure to a basket of American health care companies
- Covered call overlay implementation for income generation writing short-dated out of the money call options on approximately 50% of the portfolio
- Distribution Frequency: Monthly
- Risk rating: Medium
- Management Fee: 0.65%
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Portfolio Construction Process
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ZWEN Portfolio Breakdown
| Name | Weight | Name | Weight |
| Marathon Petroleum Corp | 5.84% | Williams Cos Inc/THE | 5.05% |
| Valero Energy Corp | 5.40% | Tc Energy Corp | 4.97% |
| BP Plc | 5.38% | Totalenergies SE | 4.92% |
| Phillips 66 | 5.21% | Equinor Asa | 4.88% |
| Exxon Mobil Corp | 5.20% | Chevron Corp | 4.83% |
| Royal Dutch Shell Plc | 5.20% | Eni Spa | 4.79% |
| Occidental Petroleum Corp | 5.15% | Eog Resources Inc | 4.69% |
| Suncor Energy Inc | 5.07% | Schlumberger NV | 4.53% |
| Canadian Natural Resources Ltd | 5.07% | Pioneer Natural Resources Co | 4.50% |
| Enbridge Inc | 5.06% | Conocophillips | 4.44% |
Note: Holdings as of March 30, 2023.
ZWHC Portfolio Breakdown
| Name | Weight | Name | Weight |
| Stryker Corp | 4.96% | Medtronic Plc | 4.32% |
| Zimmer Biomet Holdings Inc | 4.74% | Quest Diagnostics Inc | 4.32% |
| Abbvie Inc | 4.62% | Merck & Co Inc | 4.32% |
| Zoetis Inc | 4.62% | Danaher Corp | 4.30% |
| Hca Healthcare Inc | 4.58% | Amgen Inc | 4.29% |
| Becton Dickinson & Co | 4.51% | Johnson & Johnson | 4.26% |
| Humana Inc | 4.50% | Baxter International Inc | 4.22% |
| Eli Lilly & Co | 4.45% | Abbott Laboratories | 3.99% |
| Unitedhealth Group Inc | 4.41% | Pfizer Inc | 3.99% |
| Gilead Sciences Inc | 4.37% | Agilent Technologies Inc | 3.92% |
| Thermo Fisher Scientific Inc | 4.36% | Cigna Corp | 3.68% |
| Bristol-Myers Squibb Co | 4.34% |
Note: Holdings as of March 30, 2023.
BMO’s Enhanced Income ETF Line Up
BMO Canadian High Dividend Covered Call ETF ZWC Distribution Yield: 7.6% | M Mgmt. Fee: 0.65% Risk Rating: Medium | BMO Global High Dividend Covered Call ETF ZWG Distribution Yield: 7.6% | M Mgmt. Fee: 0.65% Risk Rating: Medium | ||
BMO Covered Call Dow Jones Industrial Average Hedged to CAD ZWA Distribution Yield: 6.6% | M Mgmt. Fee: 0.65% Risk Rating: Medium | |||
BMO Covered Call Technology ETF ZWT Distribution Yield: 5.1% | M Mgmt. Fee: 0.65% Risk Rating: Medium to High | BMO Premium Yield ETF
ZPAY.F | ZPAY | ZPAY.U Distribution Yield: ZPAY.F: 6.9%, ZPAY: 6.5%, ZPAY.U: 6.8% | M Mgmt. Fee: 0.65% Risk Rating: Low to Medium | ||
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ZPW: 7.6%, ZPW.U: 7.7% | M Mgmt. Fee: 0.65% Risk Rating: Low to Medium |
Yields are as of March 31, 2023.
Annualized Distribution Yield: The most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV.
1 Source: Economist Intelligence, January 2023.
2 As of March 30, 2023, Annualized Distribution Yield: The most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV.
3 As of March 30, 2023, Annualized Distribution Yield: The most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV.
Risk tolerance measures the degree of uncertainty that an investor can handle regarding fluctuations in the value of their portfolio. The amount of risk associated with any particular investment depends largely on your own personal circumstances including your time horizon, liquidity needs, portfolio size, income, investment knowledge and attitude toward price fluctuations. Investors should consult their financial advisor before making a decision as to whether this Fund is a suitable investment for them.
Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.
For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETF’s prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.
BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.
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