6 Defensive BMO ETFs Yielding 6% or More
Turn volatility into cash flow with our top 6 picks yielding 6% or more, for investors seeking to reduce volatility relative to broad markets while enhancing the level of yield in their portfolios.
Mar. 11, 2025- Exposure to a more traditionally defensive sector.
- Equal weight portfolio of utilities, telecoms, and pipeline companies, top names include Exelon, TC Energy, and Enbridge.
- Companies with strong balance sheets for sustainable dividend yields with covered call overlay for additional cash flow.
- A yield harvesting strategy on high-quality U.S. equities. For investors seeking an allocation to U.S. equities but not comfortable taking on 100% equity exposure.
- The option overlay (put and call selling) is designed to generate tax efficient cash flow from underlying holdings.1
- At current levels US Banks offer attractive valuations and potential for growth as interest rates have begun to stabilize.
- ETF offers a diversified way to get exposure to U.S. banks and deliver tax efficient1 cash flow.
- 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 a nine-year track record of providing tax efficient1 cash flow through covered call overlay.
- Exposure to blue-chip global dividend leaders, well diversified by sector, provides global growth exposure and cash flow in a one ticket solution.
- Utilizes a rules-based methodology that considers dividend growth rate, yield, payout ratio and liquidity.
- Ability to harness volatility4 and provide tax efficient1 cash flow through the option overlay.
- For investors seeking a traditionally defensive sector.
- Invested in a diversified portfolio of U.S health care and health care related companies while earning tax efficient call option premiums. Spanning across pharmaceuticals, biotechnology and life sciences.
- Top holdings contain names such as Gilead Sciences, Johnson & Johnson, Stryker Corp and Medtronic.
Fund name |
Ticker |
YTD |
1 Year |
2 Year |
3 Year |
5 Year |
10 Year |
Since Inception |
Inception date |
BMO Covered Call |
ZWU |
5.33% |
18.21% |
7.58% |
2.73% |
3.96% |
3.93% |
4.75% |
2011-10-20 |
BMO Premium Yield ETF |
ZPAY.F |
2.14% |
7.72% |
11.66% |
5.74% |
7.82% |
— |
5.97% |
2020-01-15 |
BMO Covered Call US Banks ETF CAD |
ZWK |
5.63% |
42.77% |
7.41% |
0.57% |
8.08% |
— |
5.74% |
2019-02-12 |
BMO Europe High Dividend Covered Call |
ZWE |
8.99% |
12.21% |
12.41% |
11.60% |
10.37% |
— |
8.08% |
2015-09-02 |
BMO Global High Dividend |
ZWG |
4.87% |
19.90% |
17.40% |
12.25% |
11.47% |
— |
9.61% |
2020-01-16 |
BMO Covered Call Health Care ETF CAD |
ZWHC |
7.97% |
11.98% |
10.46% |
— |
— |
— |
8.28% |
2023-01-23 |
Bloomberg, as of February 28, 2025.
*Annualized Distribution Yield as of March 5, 2025. 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. 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.
Disclaimers
For Advisor use only.
The 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. 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.
The viewpoints expressed by the author represents their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. The information provided herein does not constitute a solicitation of an offer to buy, or an offer to sell securities nor should the information be relied upon as investment advice. Past performance is no guarantee of future results. This communication is intended for informational purposes only.
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 prospectus.
The ETF referred to herein is not sponsored, endorsed, or promoted by MSCI and MSCI bears no liability with respect to the ETF or any index on which such ETF is based. The ETF’s prospectus contains a more detailed description of the limited relationship MSCI has with the Manager and any related ETF.
Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or simplified prospectus of the BMO ETFs 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 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.
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.
“BMO (M-bar roundel symbol)” is a registered trademark of Bank of Montreal, used under licence.
March 6, 2025