money while you sleep

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Honestly, Motley Fool investors must be getting tired of growth stocks. These stocks have so much promise behind them, but as we’ve learned, they can turn volatile at the drop of a hat. And that hat seems to be getting dropped again and again. So that’s why a low risk stock may finally be the answer.

I’m not saying Motley Fool investors should put everything in ultra low-risk stocks. But aren’t you also tired of constantly checking your investments? Don’t you want a stock you know will continue to do well, if not jump suddenly by 20%?

If so, here is one I would highly recommend for you.


This is the ticker for the BMO Canada High Dividend Covered Call ETF (TSX:ZWC). The exchange-traded fund (ETF) aims to expose Canadian investors to a portfolio of Canadian companies that focus on high dividends. This prime focus on creating income for investors also leads to long-term capital growth. This brings risks down, but doesn’t mean no returns.

Those returns come from stable growth for one. Look at the last year for example. Shares in the low-risk stock have grown 15%, which is pretty impressive. However, shares also continued to grow even during the beginning of 2022 while others crashed around it. Year to date, ZWC is up 5%! And that’s nothing to sneeze at for Motley Fool investors.

But focus in on the dividend

It’s in the title for a reason. This low risk stock offers investors a high dividend, which is handed out each and every month like a paycheque. In terms of ZWC, that yield currently sits at 7.2%. That’s $0.10 per month, or $1.20 per year for each share you purchase. Right now, those shares trade at just about $20 a share.

That is an excellent deal for any dividend stock, but for Motley Fool investors seeking passive income coupled with low risk, it’s even better. You get returns each and every month, while still seeing stable growth from your portfolio.

However, nothing’s perfect

There is one moment in history that Motley Fool investors should focus in on, and that’s the market crash. The ZWC fund is still quite new, coming on the market in 2017. It therefore hasn’t had a long time to create a proven track record. This meant that shares decreased back in March 2020 along with everything else.

Since then, shares have returned to those pre-pandemic levels, and are likely to stabilize as they did before. It doesn’t look like there was much share movement above $20. And hey, that’s alright if what you want is low risk. Because you still get that strong dividend to look forward to.

In fact, if you were to invest $30,000 into the low risk stock right now, you would bring in $1,800 per year in passive income alone. Let’s then say you reinvested that cash and only saw share price movement of 2% each year. In the next decade that would still give you a portfolio worth $61,813.05. And that’s also if the dividend doesn’t increase at all, which is unlikely.

Foolish takeaway

So there you have it. Double your income from an incredibly low risk stock, bring in stable returns, and sleep better at night. All while knowing you’re making far more than those growth stocks that are due to drop at any given time.

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