BMO launches global communications ETF on Toronto Stock Exchange

May 8th, 2018 | By | Category: Equities

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BMO Global Asset Management Canada has launched the BMO Global Communications Index ETF (COMM CN) on Toronto Stock Exchange, providing exposure to global stocks in the media and communications industry.

Kevin Gopaul, head of BMO Global Asset Management Canada.

Kevin Gopaul, head of BMO Global Asset Management Canada.

“This ETF provides investors with a unique balance of global companies that are reshaping and driving the market through communications, technology and new media,” said Kevin Gopaul, head of BMO Global Asset Management Canada.

The fund tracks the Solactive Media and Communications Index which includes stocks from developed market countries only.

Starting with the Solactive GBS Developed Markets Large & Mid Cap Index as the founding universe, the index implements a sector-based filtering strategy selecting companies operating in telecommunications, media and publishing services, communication equipment, web-based data, and game software.

Constituents are weighted by free-float market-capitalization with a 10% cap per issuer and a cap of 40% for the cumulative weight of all stocks with weights greater than 5%. The index is reconstituted annually and rebalanced semi-annually.

Timo Pfeiffer, head of research at Solactive, commented, “The Solactive Media and Communications Index provides a snapshot of the changing media and communications landscape, capturing the full spectrum from traditional services to newer digital forms of communication. We are happy that Bank of Montreal has chosen Solactive to provide access to this theme and I am very keen to see how this sector will evolve in the next couple of years.”

Stocks from the US account for over two-thirds (68.7%) of the total index weight with the next largest country exposures being Japan (8.5%), the UK (4.9%), and Germany (2.8%).

The telecommunications services industry accounts for a third (33.8%) of the total index weight, followed by stocks in the media (21.2%), software & services (21.0%) and technology hardware (18.9%) industries.

While there are 105 firms in the index, the top ten stocks account for over half (53.8%) of the total weight, leading to moderate idiosyncratic risk in the portfolio. The largest holdings of the fund are Apple (8.8%), Facebook (8.2%), Cisco Systems (5.9%), Verizon Communications (4.7%) and AT&T (4.7%).

COMM has a management expense ratio of 0.40%. Income generated within the fund’s portfolio is distributed to investors on a quarterly schedule.

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