Q: I hold DYN6001 in my non-registered savings account to generate USD income. It has low volatility but relatively modest monthly income due to management fees. Would ZWB.U be a better choice? Its current yield is 7.2% but comes with an MER of 0.72%. Can you suggest other options for USD income with low volatility?
5i Research Answer:
We don't mind ZWB.U; it offers exposure to utiities and enhanced income through covered call options. But we cannot compare it to a money market or tiered investment savings account. ZWB carries equity/market risk, DYN does not. SHV is a short term US treasury ETF offering a 5.25% indicated yield (it will vary) and low volatility. Fees are 0.15%. ISTB is another option, with a big more variability as it has a 1-5 year laddered bond approach. Indicated yield 3.82% and fees of 0.06%. The latter could do better if interest rates do start to decline.