An Exchange Traded Fund (ETF) is a collection of hundreds or thousands of stocks or bonds in a single fund that trades on major stock exchanges. ETFs combine the diversification of mutual funds with lower investment minimum and real-time pricing. The beauty of ETFs is that they are extremely similar to mutual funds; the difference is you purchase these investments on your own with lower fees!
A covered call ETF writes call options on the stocks held within the fund to help reduce investment risk. This also allows investors to take advantage of upside potential in the same way an individual investor trading stock options would do. This is a great strategy during market volatility while still bringing in monthly income from option writing and regular dividends.
What is the Best Covered Call ETF in Canada?
- BMAX.TO: Brompton Enhanced Multi-Asset Income ETF
- EQCL.TO: Horizons Enhanced All-Equity Asset Allocation Covered Call ETF
- GRCC.TO: Horizons Growth Asset Allocation Covered Call ETF
- HDIF.TO: Harvest Diversified Monthly Income ETF
- HDIV.TO: Hamilton Enhanced Multi-Sector Covered Call ETF
- HRIF.TO: Harvest Diversified Equity Income ETF
- HYLD.TO: Hamilton Enhanced U.S. Covered Call ETF
- ZWG.TO: BMO Global High Dividend Covered Call ETF
- ZWQT.TO: BMO Global Enhanced Income Fund
Here is a table comparing similar covered call ETFs as of October 31, 2023.
| Manager |  | |  |  | |  |
| ETF | ZWG | ZWQT | BMAX | HDIV | HYLD | HDIF |
| Inception | 2020-01-16 | 2023-06-19 | 2022-10-18 | 2021-07-19 | 2022-02-04 | 2022-02-04 |
| MER | 0.72% | 0.73% | 2.59% | 2.39% | 2.08% | 1.58% |
| AUM | $206,060,000 | $4,490,000 | $62,000,000 | $353,300,000 | $454,900,000 | $327,630,000 |
| Yield | 7.67% | 7.00% | 10.16% | 11.80% | 12.73% | 11.61% |
| Distributions | Monthly | Monthly | Monthly | Monthly | Monthly | Monthly |
| 1Y | 7.97% | N/A | 1.0% | 2.33% | 9.02% | -3.99% |
| 3Y | 8.23% | N/A | N/A | N/A | N/A | N/A |
| 5Y | N/A | N/A | N/A | N/A | N/A | N/A |
| 10Y | N/A | N/A | N/A | N/A | N/A | N/A |
