6 BMO ETFs Yielding 6% or More
BMO ETFs presents our top 6 picks yielding 6% or more for investors who are looking for ideas to enhance the level of yield in their portfolios.
Nov. 13, 2024- Sector specific exposure to a diversified portfolio of large cap dividend paying energy companies. Covered call overlay to provide tax efficient cash flow.1
- Equally weighted for further diversification across market caps. Contains names such as Exxon Mobil, Canadian Natural Resources and Kinder Morgan.
- Holdings in Utilities, Telecoms, and Pipelines provide exposure to more traditionally defensive equity exposures, with strong income through both dividend yield and option premium
- Expectations of rate cuts from central banks over the next 12 months could boost the utilities sector
- Exposure to blue-chip dividend payers in Europe. Offers complementary solution to North American exposure, through a robust and diversified core dividend portfolio
- ETF has an eight-year track record and provides tax efficient1 cash flow through the option overlay
- At current levels US Banks offer attractive valuations and potential for growth as interest rates have begun to stabilize and potential cuts are on the horizon
- ETF offers a diversified way to get exposure to U.S. banks and delivers tax efficient1 cash flow
- Canadian banks remain off of their all-time highs and represent a potentially attractive buying opportunity at a forward P/E of ~122
- Fundamentals of Canadian banks continue to be strong, and dividend pay out amounts continue to be increased, current underlying yields are in excess of 4.5%.2
- Go global. Core exposure to a diversified portfolio of high dividend global companies.
- Yield weighted and broadly diversified across sectors.
- Covered call overlay to increase yield and to provide tax efficiency.1
- Falling interest rates in most developed economies can be a tailwind for global equities.
*Annualized Distribution Yield as of November 12, 2024. 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. Source: BMO Global Asset Management.
Fund name |
Ticker |
YTD |
1 mo |
3 mo |
6 mo |
1 Y |
2 Y |
3 Y |
5 Y |
10 Y |
Since Inception |
Inception date |
BMO Covered Call |
ZWEN |
8.49% |
2.96% |
-3.49% |
-2.46% |
5.93% |
— |
— |
— |
— |
6.12% |
2023-01-23 |
BMO Covered Call |
ZWU |
14.25% |
-0.97% |
5.52% |
14.71% |
23.93% |
6.04% |
3.13% |
3.49% |
3.69% |
4.69% |
2011-10-20 |
BMO Europe High Dividend Covered Call |
ZWE |
7.59% |
-2.20% |
-0.55% |
1.63% |
14.55% |
14.26% |
8.59% |
7.08% |
— |
7.41% |
2015-09-02 |
BMO Covered Call US |
ZWK |
33.39% |
6.93% |
5.97% |
18.79% |
59.26% |
3.91% |
-2.47% |
3.19% |
— |
4.05% |
2019-02-12 |
BMO Covered Call Canadian |
ZWB |
15.03% |
0.42% |
8.24% |
13.61% |
33.49% |
9.84% |
3.83% |
7.67% |
7.29% |
8.40% |
2011-01-28 |
BMO Global High Dividend |
ZWG |
17.10% |
0.86% |
3.55% |
10.54% |
23.67% |
15.55% |
9.28% |
— |
— |
8.41% |
2020-01-16 |
Performance as of October 31, 2024. Source: BMO Global Asset Management.
* Past Performance is not indicative of future results. Performance is shown net of fees, in the currency of the respective share class with dividends reinvested.
1 Tax Efficient: as compared to an investment that generates an equivalent amount of interest income.
2 Source: BMO Global Asset Management as of May 31, 2024.
3 Duration: A measure of the sensitivity of the price of a fixed income investment to a change in interest rates. Duration is expressed as number of years. The price of a bond with a longer duration would be expected to rise (fall) more than the price of a bond with lower duration when interest rates fall (rise).
4 Volatility: Measures how much the price of a security, derivative, or index fluctuates.
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.
Distribution yields are calculated by using the most recent regular distribution, or expected distribution, (which may be based on income, dividends, return of capital, and option premiums, as applicable) and excluding additional year end distributions, and special reinvested distributions annualized for frequency, divided by current net asset value (NAV). The yield calculation does not include reinvested distributions. Distributions are not guaranteed, may fluctuate and are subject to change and/or elimination. Distribution rates may change without notice (up or down) depending on market conditions and NAV fluctuations.
The payment of distributions should not be confused with the BMO ETF’s performance, rate of return or yield. If distributions paid by a BMO ETF are greater than the performance of the investment fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a BMO ETF, and income and dividends earned by a BMO ETF, 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.
Cash distributions, if any, on units of a BMO ETF (other than accumulating units or units subject to a distribution reinvestment plan) are expected to be paid primarily out of dividends or distributions, and other income or gains, received by the BMO ETF less the expenses of the BMO ETF, but may also consist of non-taxable amounts including returns of capital, which may be paid in the manager’s sole discretion. To the extent that the expenses of a BMO ETF exceed the income generated by such BMO ETF in any given month, quarter, or year, as the case may be, it is not expected that a monthly, quarterly, or annual distribution will be paid. Distributions, if any, in respect of the accumulating units of BMO Short Corporate Bond Index ETF, BMO Short Federal Bond Index ETF, BMO Short Provincial Bond Index ETF, BMO Ultra Short-Term Bond ETF and BMO Ultra Short-Term US Bond ETF will be automatically reinvested in additional accumulating units of the applicable BMO ETF. Following each distribution, the number of accumulating units of the applicable BMO ETF will be immediately consolidated so that the number of outstanding accumulating units of the applicable BMO ETF will be the same as the number of outstanding accumulating units before the distribution. Non-resident unitholders may have the number of securities reduced due to withholding tax. Certain BMO ETFs have adopted a distribution reinvestment plan, which provides that a unitholder may elect to automatically reinvest all cash distributions paid on units held by that unitholder in additional units of the applicable BMO ETF in accordance with the terms of the distribution reinvestment plan. For further information, see the distribution policy in the BMO ETFs’ 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.
BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate.
®/™Registered trade-marks/trade-mark of Bank of Montreal, used under licence.