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
- 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
- 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
- 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 30, 2023.
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