E265 – A Deep Dive on Covered Call ETFs

BMO ETFs: Views from the Desk

In this episode, Jonathan Lau, Olivia Li, and host, Skye Collyer, take a deep dive into covered call ETFs—discussing how they work and strategies to utilize them for portfolio positioning in today’s marketplace.

Skye Collyer is a Director of ETF Distribution at BMO Global Asset anagement (BMO GAM). She is joined by Jonathan Lau and Olivia Li, Portfolio Managers at BMO Exchange Traded Funds. Recorded live on Tues, April 15, 2025.

ETFs:

• BMO Covered Call Canadian Banks ETF (ZWB)
• BMO Covered Call Technology ETF (ZWT)
• BMO Equal Weight Banks Index ETF (Ticker: ZEB)
• BMO Covered Call Utilities ETF (Ticker: ZWU)
• BMO Europe High Dividend Covered Call Hedged to CAD ETF (ZWE)
• BMO Canadian High Dividend Covered Call ETF (ZWC)
• BMO US High Dividend Covered Call ETF (ZWH)
• BMO Europe High Dividend Covered Call ETF (ZWP)

Total returns, as of 2025/03/31:

ZWB: 1 yr: 9.51%, 3yr: 2.27%, 5 yr 13.07%, 10 yr: 7.84%, SI: 8.13%

ZEB: 1 yr: 13.57%, 3yr: 5.17%, 5 yr 17.45%, 10 yr: 10.96%, SI: 11.27%

ZWU: 1 yr: 18.89%, 3yr: 1.98%, 5 yr 7.92%, 10 yr: 4.29%, SI: 4.92%

ZWP: 1 yr: 12.62%, 3yr: 13.20%, 5 yr 12.41%, SI: 6.61%

Annualized distribution yield, as of 2025/04/23:

ZWB: 7.05%

ZEB: 4.20%

ZWU: 7.65%

ZWP: 6.87%

ZWU, Utilities about 56%, as of April 15, 2025. Allocations subject to change without notice.

#1 Canadian covered call provider by assets under management, National Bank Report, Jan 3, 2025.

BMO ETFs has 195 tickers, BMO GAM, as of Dec 31, 2024.

BMO ETFs launched the first covered call in Canada in 2011.

Strike price: is the price at which the underlying security can be either boughtor sold once exercised.

Out-of-the-money: how far the strike price is set relative to the underlying stock price.

At the money: have a strike price that is equal to the current market price ofthe underlying holding.

Call: a call option gives the holder the right to buy a stock.

Disclaimers:

Tax Efficient: as compared to an investment that generates an equivalent amount of interest income.

Dividends are not guaranteed and may fluctuate. Past performance is not indicative of future results.This yield is calculated by taking the most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV. The yield calculation does not include reinvested distributions.

The viewpoints expressed by the speakers represent their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. 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.

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. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.

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 simplified 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.

This podcast is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

“BMO (M-bar roundel symbol)” is a registered trademark of Bank of Montreal, used under licence.