Topic: How To Invest

Q: Hello. I am a new member. Could you please give me your opinion of ZWE—an exchange-traded fund listed on Toronto. This ETF has a high yield of 6.8%. Thank you for your response.

Article Excerpt

A: BMO Europe High Dividend Covered Call Hedged to CAD ETF, $21.18, symbol ZWE on Toronto (Units outstanding: 33.9 million; Market cap: $718.0 million; www.bmo.com/gam/ca/investor/products/etfs), holds mostly high-quality European stocks. These include Swiss Re AG, HSBC Holdings plc, Zurich Insurance Group, BMW, Total SA, Teliasonera AG, BP plc, Allianz SE, Imperial Brands plc and Nordea Bank AB. The ETF is reasonably well-balanced across the five economic sectors. It’s also focused on more-stable European countries, with 25.4% of its assets in the U.K., 24.4% in Switzerland, 20.3% in France, 16.5% in Germany, 4.1% in Sweden, 3.7% in Finland, 3.5% in Belgium and 2.3% in the Netherlands. In general, a substantial portion of the ETF’s foreign currency exposure is hedged against the movement of the euro, Swiss franc, pound and so on against the Canadian dollar. That means for the most part the ETF’s Canadian-dollar value rises and falls solely with the movements of the stocks in its portfolio. Expenses on the units are 0.65%…

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