Q: Hello Team,
Could you comment on ZWEN please. Thinking about parking $ for 1-2 years, wile collecting 9%. What is the downside in the current environment? Can you recommend something else if this is not a good idea.
Thanks!
Could you comment on ZWEN please. Thinking about parking $ for 1-2 years, wile collecting 9%. What is the downside in the current environment? Can you recommend something else if this is not a good idea.
Thanks!
5i Research Answer:
ZWEN offers a high yield and has done well this year (up 15%). As an energy covered call fund, it still has exposure to the sector or course. In a sector decline, the covered call income only provides a small cushion. This ETF could still decline, perhaps a lot if we saw a 2020 type of scenario in the energy patch. But we would not really expect that and it would be the same with any energy fund. The fund is fairly small at $70M in assets. We would consider it 'ok' but would prefer ZWC so there is better sector diversification. Its yield is less (6.46%) but it has performed better and it is larger and likely to be less volatile.