FTSE Russell launches CAD-hedged global sector indices

Apr 10th, 2017 | By | Category: ETF and Index News

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FTSE Russell has unveiled four new global sector indices with built-in currency hedging. The Russell Developed Large Cap 100% Hedged to CAD indices are designed for Canadian market participants and capture specific global exposures related to the consumer staples, consumer discretionary, banking and insurance sectors.

Ken O’Keeffe, managing director, global head of ETFs at FTSE Russell

Ken O’Keeffe, managing director, global head of ETFs at FTSE Russell.

Each index includes large and mid-cap companies in developed countries of the Russell Global Index Series identified in accordance with the Russell Global Sectors classification system A cap of 10% per issuer is utilized to promote diversification within the index. The hedging to Canadian dollars is designed to help Canadian investors minimize the currency risk of holding stocks traded in foreign currencies.

The names of the new FTSE Russell global sector indices are:

Russell Developed Large Cap Consumer Staples Capped 100% Hedged to CAD Index
Russell Developed Large Cap Consumer Discretionary Capped 100% Hedged to CAD Index
Russell Developed Large Cap Banks Capped 100% Hedged to CAD Index
Russell Developed Large Cap Insurance Capped 100% Hedged to CAD Index

The indices have been licensed to BMO Global Asset Management to underlie four new ETFs which have been rolled out on Toronto Stock Exchange.

Ken O’Keeffe, managing director, global head of ETFs at FTSE Russell, commented: “After recognizing a growing desire among Canadian market participants for an index suite that captures global sector exposures in a targeted way, we are delighted to roll out this new suite of indices, further strengthening our Canadian index offering. We’re also thrilled BMO Global Asset Management has chosen to partner with us to use these indices as the basis for their new sector ETFs.”

The new BMO funds and their respective ticker codes are listed below:

BMO Global Consumer Staples Hedged to CAD Index ETF (STPL)
BMO Global Consumer Discretionary Hedged to CAD Index ETF (DISC)
BMO Global Banks Hedged to CAD Index ETF (BANK)
BMO Global Insurance Hedged to CAD Index ETF (INSR)

Each ETF has an expected management expense ratio of 0.40%.

Kevin Gopaul, head of BMO Global Asset Management Canada, said: “We are excited to have partnered with FTSE Russell to enhance our suite of sector ETFs. We have focused on key global exposures, consumer discretionary and consumer staples, where there is growing consumer purchasing power, banks which provides access to global economic growth and insurance which can benefit in a rising interest rate environment.”

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