TORONTO, July 30, 2026 /CNW/ -- BMO Asset Management Inc. ("BMOAM Inc."), the manager of the BMO ETFs, today announced the launch of BMO Credit Stress Opportunities ETF (the "BMO ETF"), offering CAD Units (TSX: ZCDX) and USD Units (TSX: ZCDX.U) (collectively, the "Units").
BMO Credit Stress Opportunities ETF has closed its initial offering of Units and is listed and trading on the Toronto Stock Exchange.
The BMO ETF seeks to provide exposure to changes in the credit conditions associated with a broad, diversified portfolio of U.S. high yield corporate issuers, while minimizing the effects of interest rate fluctuations, primarily by taking a short position on credit default index derivatives ("CDX"). Currently, BMO Credit Stress Opportunities ETF provides such investment opportunities primarily through CDX referencing the Markit CDX North America High Yield Index (the "HY CDX Index"). By taking a short position on CDX, the BMO ETF will pay a premium to enter into the CDX and will receive default payments under the CDX when there is a credit event. The BMO ETF may also use other derivatives such as swaps (including credit default swaps), options or other derivatives to meet its investment objectives.
The CDX and other derivatives used by the BMO ETF will reference the HY CDX Index or the individual issuers referenced in this index. These derivative positions offer opportunities to benefit from the deterioration of the creditworthiness of the referenced issuers, including the widening of credit spreads or the occurrence of credit events such as defaults. The BMO ETF may receive payments in such circumstances and, as a consequence, the BMO ETF may increase in value. On the other hand, if the creditworthiness of the referenced issuers improves and credit spreads narrow, the value of the CDX held by the BMO ETF may decline in value and, as a consequence, the BMO ETF may decline in value.
Investment Suitability Risk
Investors and their financial advisors are strongly urged to carefully consider whether the BMO ETF is a suitable investment for the investor in light of the information set out in the prospectus and make a decision to invest in (or sell) Units of the BMO ETF only after such careful consideration. BMOAM Inc. does not make any recommendation as to whether the BMO ETF is a suitable investment for any investor.
Investors and their financial advisors should note that the BMO ETF's investment strategies require investors to make tactical investment decisions regarding when to buy or sell units of the BMO ETF, since the BMO ETF primarily enters into CDX positions that benefit from increasing U.S. high yield credit spreads, which is a measure of credit risk, and decline in value when credit spreads decrease or credit conditions improve. Each investor will need to determine when it is appropriate for the investor to purchase Units of the BMO ETF to benefit from increasing U.S. high yield credit spread or to sell the Units of the BMO ETF during periods of decreasing credit spreads, while taking into account the investor's own personal circumstances and risk tolerance.
An investment in the BMO ETF is only suitable for investors who are prepared and able to adopt a practice of monitoring their investment in the BMO ETF, and to monitor market conditions (i.e., periods of increasing or decreasing credit spread) to ensure suitability and to make informed investment decisions whether to buy, hold or sell Units of the BMO ETF. The BMO ETF is not a suitable investment for investors who are not prepared or able to adopt such practice.
The BMO ETF is also not a suitable investment for an investor that does not understand the investment objective or investment strategies or the risks involved in investing in the BMO ETF.
Further information on BMO ETFs can be found at www.bmoetfs.com.
Disclaimers
This ETF is an alternative mutual fund. It has the ability to invest in asset classes or use investment strategies that are not permitted for other types of mutual funds. The specific strategies that differentiate this ETF from other types of mutual funds include the: increased ability to use derivatives for hedging and non-hedging purposes; increased ability to sell securities short; and ability to borrow cash to use for investment purposes. While these strategies will be used in accordance with the ETF's investment objectives and strategies, during certain market conditions they may accelerate the pace at which your investment decreases in value.
Investors should be prepared and able to adopt a practice of monitoring their investment in the ETF, and to monitor market conditions (i.e., periods of increasing or decreasing credit spread) to ensure suitability and to make informed decisions.
Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent prospectus.
This communication is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual's investment objectives and professional advice should be obtained with respect to any circumstance.
Commissions, management fees, and expenses all may be associated with investments in exchange-traded funds. Please read the ETF Facts or prospectus of the BMO ETF before investing. Exchange-traded funds are not guaranteed, their values change frequently, and past performance may not be repeated.
For a summary of the risks of an investment in the BMO ETF, please see the specific risks set out in the prospectus. Exchange-traded funds trade like stocks, fluctuate in market value, and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.
BMO ETFs are managed by BMO Asset Management Inc., an investment fund manager, a portfolio manager, and a separate legal entity from Bank of Montreal.
BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate.
"BMO (M-bar roundel symbol)" is a registered trademark of Bank of Montreal, used under licence.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of April 30, 2026. Serving clients for more than 200 years, BMO provides a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services across Canada, the United States, and select markets globally. BMO is innovating for business value, by deploying and integrating human, digital and artificial intelligence to personalize client experiences, augment teams, and automate its business responsibly. Driven by its purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.
SOURCE BMO Financial Group - Communications
Media Contact: Jeff Roman, Toronto, [email protected], (416) 867-3996
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