BMO Asset Management has introduced five new ETFs on Toronto Stock Exchange.
Mark Raes, Head of Product, BMO Global Asset Management.
The line-up includes three actively managed equity ETFs, two of which deliver income-enhanced exposure to stocks from the energy and healthcare sectors, while the third offers access to a portfolio of agricultural companies.
The remaining two ETFs are core fixed income funds delivering access to US Treasury Inflation-Protected Securities (TIPS) or a portfolio of investment-grade dollar-denominated securities from multiple bond sectors.
Commenting on the new listings, Mark Raes, Head of Product at BMO Global Asset Management, said: “We’re excited to introduce new ETF strategies to help investors make progress and build better portfolios. Our new energy and health care covered call ETFs address growing investor demand for higher-yielding sector-based solutions while additions to our fixed income shelf and a new global agriculture ETF help investors navigate inflation and rising interest rates.”
The ETFs
The BMO Covered Call Energy ETF (ZWEN CN) provides exposure developed market stocks of energy and energy-related companies, including firms in the clean energy sector. The fund seeks to boost its yield and provide some downside protection by writing call options on select constituents within the portfolio. The call options are written out of the money and selected based on analyzing the implied volatility of certain options contracts. ZWEN comes with a management fee of 0.65%.
The BMO Covered Call Health Care ETF (ZWHC CN) follows a similar investment approach as ZWEN but focuses on US-listed companies operating within the healthcare sector. ZWHC also has a management fee of 0.65%.
The BMO Global Agriculture ETF (ZEAT CN) provides exposure to large-cap firms worldwide that are involved in agricultural production, chemicals, farm machinery, food distribution, and food packaging. ZEAT comes with a management fee of 0.35%.
The BMO US TIPS Index ETF (TIPS CN) tracks the Bloomberg US Treasury Inflation-Linked Bond Index which consists of US dollar-denominated US government securities whereby principal and interest are inflation-linked. Eligible securities must have at least one year remaining to maturity and more than $500m outstanding. The index is weighted by market capitalization and rebalanced monthly. TIPS comes with a management fee of 0.15%. The fund is also available in CAD-hedged (TIPS.F CN) and USD (TIPS.U CN) share classes.
The BMO US Aggregate Bond Index ETF (ZUAG CN) tracks the Bloomberg US Aggregate Bond Index which measures the investment-grade, US dollar-denominated, fixed-rate taxable bond market, consisting of US Treasuries, government-related bonds, corporate bonds, mortgage-backed pass-through securities, commercial mortgage-backed securities, and asset-backed securities with at least one year remaining to maturity. The index is also weighted by market capitalization and rebalanced monthly. ZUAG comes with a management fee of 0.08%. The fund is also available in CAD-hedged (ZUAG.F CN) and USD (ZUAG.U CN) share classes.