covered calls cap bank rally upside
ZWB (Covered Call Canadian Banks ETF) is likely to lag pure six-bank exposure because it writes covered calls without leverage, delivering a lower distribution yield (~just over 5%) and capturing less upside during bank rallies.
Writing covered calls without leverage limits distribution yield to just over 5% and systematically caps gains during Canadian bank rallies. The structure delivers less total return than pure six-bank exposure over an upward-trending period.
"Top Performing Canadian Banks Covered Call ETF is Beating the Banks?! | Mulvihill CBNK ETF"