The BMO 2013 Corporate Bond Target Maturity ETF (ZXA) will continue its operations as an exchange traded short-term bond fund as originally provided for in its prospectus, effective 31 December 2013.
This will enable investors to continue to hold their existing units as well as providing the opportunity for investors to purchase and sell units at their discretion instead of at a set termination date.
In connection with continuing ZXA past its target maturity date, BMO Asset Management is making the following changes:
• The name of ZXA will change to BMO Ultra Short-Term Bond ETF;
• The ticker symbol will change to ZST;
• The portfolio holdings of ZST will focus on Canadian government and corporate bonds with a term of one year or fewer;
• The portfolio holdings of ZST may also include high yield bonds with a term of one year or fewer, and floating rate investments and preferred shares with less than a year to reset;
• The management fee will be reduced from 19 bps to 15 bps; and
• The units of ZXA will be consolidated on a one for four basis, which is expected to reduce trading costs.
“The ZXA changes will give investors a valuable portfolio tool to manage cash and short dated fixed income,” says Kevin Gopaul, senior vice president and chief investment officer, BMO AM. “The multiple asset classes within BMO Ultra Short-Term Bond ETF are expected to enhance the overall yield. This diversification across asset classes brings meaningful innovation to short term ETFs by improving yield without concentrating risks. Additionally, the unit consolidation should make ZST even more appealing by making it more cost efficient to trade.”