BMO Financial Group’s exchange-traded fund business has surpassed USD7bn in assets under management and has grown by USD1bn (16 per cent) in the last two months alone.
“Our recent success has been driven by flows into ETFs which combine growth with attractive income,” says Kevin Gopaul (pictured), chief investment officer and senior vice president, BMO Asset Management. “We are extremely proud to have experienced such incredible growth over the last three years and will continue to build on this success by anticipating the needs of investors and delivering exceptional product offerings.”
In June 2009, BMO AM, a member of BMO Financial Group, became the only bank-related entity in Canada to offer ETFs. In just over three years, BMO AM’s ETF line-up has grown to 44 funds, including several industry firsts.
Recently, several funds in particular have been capturing the attention of investors:
BMO High Yield US Corporate Bond Hedge CAD Index ETF replicates as much as possible the performance of the Barclays Capital US High Yield Very Liquid Index CAD Hedged net of expenses. The US dollar currency exposure is hedged back to Canadian dollars.
BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF provides exposure to a portfolio of Dow Jones Industrial Average companies while earning call option premiums. The fund invests in securities of the Dow Jones Industrial Average, and dynamically writes covered call options. The underlying portfolio is rebalanced to maintain better representation of the broad market and of American industry. Options are rolled forward upon expiry.
BMO Monthly Income ETF delivers the performance of the underlying basket of higher yielding BMO ETFs. ETFs are selected by having a higher yield than either the equity market represented by the BMO Dow Jones Canada Titans 60 Index ETF or the fixed income market represented by the BMO Aggregate Bond Index ETF. The holdings are weighted by yield, with 50 per cent investment in each of equity and fixed income and a cap of 20 per cent for each security with a range of six to 10 ETFs. The ETF is rebalanced quarterly and reconstituted semi-annually in June and December.