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BMO ETF
About 2.5% recurring income, and over the last 3 years capital grew 20%/yr.
Payout over time
Fund health
This fund sells call options on its holdings in exchange for the cash it distributes. The return split below shows how much of this fund's own return came from price versus distributions; the full comparison against its plain twin ZEB.TO is further down this page.
Where the 3-year return came from
3-year annualized, on a shared scale: bars left of the line are negative. Capital appreciation is the fund's own unit-price change; income return is the contribution from distributions being reinvested. The two combine (multiplicatively) to the total return.
Dividend growth
The fund's recurring dividend income per unit, year by year, stripped of return of capital and capital gains. This tracks whether the actual dividend stream is rising, which the headline yield can't show on its own, since a yield can be held up by return of capital or one-off capital gains.
How it's taxed
The CRA taxes each distribution dollar by its character. These shares are measured against the full taxable distribution, including any portion the fund reinvested as units rather than paying in cash.
| Character | % of taxable | $ / unit |
|---|---|---|
| Eligible dividends | 54% | $0.7315 |
| Return of capital | 46% | $0.6185 |
For a covered-call or leveraged fund, return of capital can include option premium or realized gains classified as ROC for tax purposes, not your capital handed back. It still lowers your cost base, so the deferred tax can increase a later capital gain or reduce a later capital loss when you sell. If return of capital keeps building up and your cost base reaches zero, any further return of capital is taxed as a capital gain in the year you receive it, not deferred to a sale.
Based on BMO ETF's 2025 T3 / tax-factor filing. Character can vary year to year. This is not tax advice; consult a tax professional about your situation.
Character mix by year
What you keep, in your account
Each figure below starts from the headline yield of 4.7% and shows an estimate of what you keep after tax. Where you hold the fund changes the answer: a TFSA shelters Canadian tax and can still lose foreign withholding tax when the fund has foreign withholding, a non-registered account taxes each character at its own rate, and an RRSP defers tax until you withdraw.
These figures are estimates at the top ON marginal tax rate, not your personal rate. The return-of-capital portion is not taxed now: it lowers your cost base, so more of your eventual sale is taxed as a capital gain instead.
Illustrative, not tax advice.
Fund vs plain twin
ZEB.TO is a comparable plain-vanilla fund in the same space, without the options or leverage overlay.
| Last 36 months | ZWB.TO BMO Covered Call Canadian Banks ETF | ZEB.TO BMO Equal Weight Banks Index ETF |
|---|---|---|
| Distribution yield | 4.7% | 2.3% |
| Total return (3y/yr) | 28.2% | 35.2% |
| Capital growth (3y/yr) | 20.1% | 30.2% |
| Growth of $100, reinvested | $211 | $247 |
| Growth of $100, not reinvested | $173 | $221 |
ZWB.TO paid about 2.4pp more distribution yield (trailing 12 months), but ZEB.TO earned +7.0pp per year more in total return over the last 36 months. Covered-call funds sell call options on their holdings, which can limit how much upside they keep in exchange for the cash they distribute.
Recent dividend activity in holdings
What Premium adds
Next steps
Prices as of 2026-07-27. Distributions as of 2026-07-28. Tax character year 2025.
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Coverage 6.0×: The fund paid a 4.7% distribution rate against a 28.2% a year total return; the total return was at least the current distribution rate over this window.
Of the 4.7% distribution rate, 2.5 points were classified as recurring income in the latest T3 tax-character split (dividends, interest, foreign income); the rest was capital gains and return of capital.
Why the price moved
An approximation: the plain twin's holdings are similar, not identical, and financing costs vary. The gap reflects option assignment, financing costs, and distributions relative to total return.
Own payout record
Cash distributed per unit, by calendar year, from the fund's own distribution history (up to the last 6 years). "Reduced" marks a year where the cash paid per unit fell more than 5% versus the prior year.
Trailing 12-month cash yield; 3-year annualized total and price return. Past performance is not indicative of future results.