BMO's seven new ETFs bring its total to 58

Europe fund is third to be listed on TSX, all launched this month.

Rudy Luukko 15 February, 2014 | 12:07AM
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BMO Asset Management Inc. continued to broaden its diverse line-up of exchange-traded funds today as seven new ETFs opened for trading on the Toronto Stock Exchange. This brings the total to 58 for the No. 2 firm in the Canadian ETF industry, which has assets of about $12.5 billion.

Four of the new ETFs are in core equity categories: U.S., international and European. The fourth equity mandate is a financial-services fund investing in U.S. banks. The three income funds consist of a Canadian bond fund, a U.S. corporate-bond fund and a floating-rate high-yield fund.

BMO MSCI Europe High Quality Hedged to CAD Index becomes only the third Canadian-listed European equity ETF, all of which were launched this month. The first was First Trust AlphaDEX European Dividend Index ETF (CAD-Hedged) EUR on Feb. 4, followed by First Asset MSCI Europe Low Risk Weighted RWE on Feb. 11.

BMO's Europe ETF is the first Canadian-listed ETF in any fund category to track an MSCI Quality Index, notes Kevin Gopaul, chief investment officer of BMO Asset Management. The index methodology selects large-and mid-cap European stocks that have high returns on equity, stable earnings growth and low financial leverage.

The other new BMO ETFs are:

  • BMO US High Dividend Covered Call, which is actively managed by BMO Asset Management. It employs a proprietary rules-based methodology that screens U.S. stocks on the basis of dividend growth, yield and payout ratio. Holding 30 large-cap dividend-paying stocks, the fund won't hedge its currency exposure. It may hold covered-call options on selected holdings to mitigate risk and generate capital gains. Distributions are to be made monthly.

  • BMO MSCI EAFE Index, which seeks to replicate the popular index of large- and mid-cap European, Asian and Pacific Rim stocks. Offering currency diversification, it's an unhedged alternative to BMO MSCI EAFE Hedged to CAD Index ZDM, offered since October 2009.

  • BMO Equal Weight US Banks Index, which invests in U.S. large-cap banks and provides U.S. currency exposure. It's the unhedged counterpart of BMO Equal Weight US Banks Hedged to CAD Index ETF ZUB, offered since May 2010.

  • BMO Discount Bond Index, a Canadian fixed-income fund that will hold investment-grade domestic bond issues trading near or below their par value. All of the fund's holdings are denominated in Canadian dollars.

  • BMO Short-Term US IG Corporate Bond Hedged to CAD Index, providing broad currency-hedged exposure to U.S. investment-grade corporate bonds with maturities of five years or less.

  • BMO Floating Rate High Yield, providing exposure to high-yield bonds while mitigating the effects of interest-rate fluctuations through the use of derivatives such as credit default swaps and interest-rate swaps.

Fund Symbol Reference index Mgmt
Fee (%)
BMO MSCI Europe High Quality Hedged
to CAD Index
ZEQ MSCI Europe Quality 100% Hedged to CAD Index 0.40
BMO US High Dividend Covered Call ZWH None (Actively managed) 0.65
BMO Equal Weight US Banks Index ZBK Dow Jones U.S. Large-Cap Banks Equal Weight
Total Stock Market Index
BMO Discount Bond Index ZDB FTSE TMX Canada Universe Discount Bond Index 0.20
BMO Short-Term US IG Corporate Bond
Hedged to CAD Index
ZSU Barclays US Investment Grade 1 to 5 Year
Corporate Bond Capped Index CAD Hedged
BMO Floating Rate High Yield ZFH None (Actively managed) 0.40
Source: BMO Asset Management Inc.

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About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

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