BMO expands line-up with seven new ETFs

Feb 15th, 2019 | By | Category: ETF and Index News

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BMO Asset Management has launched seven new ETFs on Toronto Stock Exchange.

BMO expands line-up with seven new ETFs

The new funds include three asset allocation ETFs as well as four ETFs providing exposure to different segments of the US equity and fixed income markets.

The new funds include three asset allocation ETFs which invest in other BMO equity and fixed income ETFs to provide globally diversified portfolios.

The other four ETFs provide exposure to different segments of the US equity and fixed income markets.

The asset allocation ETFs include the BMO Conservative ETF (ZCON CN), targeting 60% fixed income and 40% equity; the BMO Balanced ETF (ZBAL CN), targeting 40% fixed income and 60% equity; and the BMO Growth ETF (ZGRO CN), targeting 20% fixed income and 80% equity. The ETFs rebalance to their strategic allocation weights on a quarterly basis.

“We are always looking for ways to help investors build better portfolios,” said Kevin Gopaul, Global Head of ETFs, BMO Global Asset Management. “These low-cost, market-exposure asset allocation ETFs provide access to our award-winning suite of ETFs in a new way.

Gopaul added, “The new asset allocation ETFs provide diversified exposures with quarterly rebalancing, which help investors stay in the market as a buy-and-hold strategy.”

Each of the three ETFs trades in Canadian dollars and comes with a management expense ratio (MER) of 0.20%.

The other four newly launched ETFs are outlined below:

The BMO Ultra Short-Term US Bond ETF (ZUS.U CN) is actively managed and provides exposure to a diversified mix of short-term US fixed income asset classes with a term to maturity of less than one year.

The fund primarily invests in US investment grade corporate bonds but has the ability to add exposure to government bonds, high yield bonds, floating rate notes, and preferred shares.

The portfolio is re-balanced based on the portfolio manager’s fundamental analysis, relative strength indicators, and risk-adjusted yield expectations.

According to BMO, the ETF can act either as a yield enhancement compared to cash balances or as part of a defensive rotation strategy within a fixed income portfolio.

The fund trades in US dollars and distributes income within its portfolio. An accumulating share class is also available under the ticker ZUS.V CN. Its MER is 0.17%.

The BMO Covered Call US Banks ETF (ZWK CN) is also actively managed. It invests in a portfolio of US banking stocks, which tracks the performance of the Solactive Equal Weight US Health Care Index, while earning call option premiums through the use of a covered call overlay.

The call options are written out of the money and selected based on the option’s implied volatility.

The underlying portfolio is re-balanced and reconstituted semi-annually in June and December.

The fund trades in Canadian dollars, distributes income to investors monthly, and comes with an MER of 0.73%

The BMO Nasdaq 100 Equity Index ETF (ZNQ CN) provides exposure to a portfolio of large-cap US equities. It tracks the Nasdaq 100 Index, a market cap-weighted index reflecting the performance of the 100 largest non-financial securities listed on Nasdaq Exchange.

The Nasdaq 100 is one of the most widely followed benchmarks for the US equity market. It is well known for being ‘tech heavy’ (information technology is the largest sector exposure at 42.5%) but also includes industrial, retail, communication, biotechnology, health care, transportation, media, and service companies.

The largest constituents are currently Microsoft (9.6%), Apple (9.5%), Amazon (9.3%), Alphabet (8.6%), and Facebook (4.7%).

The fund trades in Canadian dollars, distributes income to investors annually, and comes with an MER of 0.39%.

The BMO Equal Weight US Health Care Index ETF (ZHU CN) provides passive exposure to a portfolio of US health care stocks as determined by index provider Solactive’s Industry Classification Benchmark.

The fund is linked to the Solactive Equal Weight US Health Care Index. Stocks are equally weighted within the index and rebalanced quarterly.

The fund trades in Canadian dollars, distributes income to investors annually, and comes with an MER of 0.39%.

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