Product Insights

Top-Yielding Covered Call Sector ETFs

BMO ETFs presents our top 3 picks for investors looking to add covered call sector ETFs in their portfolios.

May 30, 2023
ZWEN BMO Covered Call Energy ETF
  • Gain access to a concentrated diversified portfolio of North American listed energy, and energy related companies
  • Oil prices remain elevated due to ongoing concerns with production and ongoing conflicts with Russia and Ukraine
  • Yields are attractive and option writing capitalizes on volatility amongst equities in the sector
  • Effective inflation sensitive portfolio satellite
ZWB BMO Covered Call Canadian Banks ETF
  • Banks have sold off, presenting an attractive valuation and yield pick-up opportunity
  • Fundamentals continue to be strong with Forward Price-to-Earnings below 10x, and underlying dividend yield in excess of 4%**
  • Seasonality could be a tailwind in the second half of 2023
ZWT BMO Covered Call Technology ETF
  • Gain access to a concentrated diversified portfolio of North American information technology and technology-related companies
  • Tech sector remains well below 2021/2022 levels, which could serve as a good entry point into the space
  • Volatility amongst equities in the sector enhances yield generation from covered call writing within the portfolio

Contact your BMO Exchange Traded Funds specialist for more information.

* Annualized Distribution Yield as of May 30, 2023: The most recent regular distribution, or expected distribution, (excluding additional year-end distributions) annualized for frequency, divided by current NAV. Source: BMO Global Asset Management.

** Bloomberg, as of May 302023.


Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.

This communication is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance The payment of distributions is not guaranteed and may fluctuate.

The payment of distributions is not guaranteed and may fluctuate. The payment of distributions should not be confused with an Exchange Traded Fund’s performance, rate of return or yield. If distributions paid by the Exchange Traded Fund are greater than the performance of the Exchange Traded Fund, your original investment will shrink. Distributions paid as a result of capital gains realized by an Exchange Traded Fund, and income and dividends earned by an Exchange Traded Fund are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base goes below zero, you will have to pay capital gains tax on the amount below zero. Please refer to the Exchange Traded Funds, distribution policy in the prospectus.

Commissions, management fees and expenses (if applicable) all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. 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 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.

®/TM Registered trade-marks/trade-mark of Bank of Montreal, used under licence.