BMO Introduces New Exchange Traded Products, Including Innovative Structured Outcome ETFs
- New Buffer and Accelerator ETFs offer downside protection and enhanced equity returns for investors, respectively
- BMO Long Short Canadian Equity ETF and BMO Long Short US Equity ETF feature a long/short equity strategy to take advantage of both over-valued and under-valued stocks
TORONTO, Oct. 2, 2023 /CNW/ - BMO Asset Management Inc. (BMOAM Inc.), the manager of the BMO ETFs, and BMO Investments Inc., the manager of BMO Global Dividend Opportunities Fund, today announced the launch of seven new BMO ETFs and an Active ETF Series of BMO Global Dividend Opportunities Fund.
The new BMO ETFs listed in the table below have closed their initial offering of exchange traded units and today are listed and trading on the exchanges set out below.
New BMO ETF | Class of Units | Exchange and |
BMO Long Short Canadian Equity ETF | CAD Units | TSX: ZLSC |
BMO Long Short US Equity ETF | CAD Units | TSX: ZLSU |
BMO S&P/TSX 60 Index ETF | CAD Units | TSX: ZIU |
BMO Canadian Banks Accelerator ETF | CAD Units | NEO: ZEBA |
BMO USD Cash Management ETF | CAD Units | TSX: ZUCM |
BMO USD Cash Management ETF | USD Units | TSX: ZUCM.U |
BMO US Equity Accelerator Hedged to CAD ETF | CAD Units | NEO: ZUEA |
BMO US Equity Buffer Hedged to CAD ETF – October | CAD Units | NEO: ZOCT |
"We are pleased to announce the launch of our new funds, including two types of Structured Outcome ETFs, Buffers and Accelerators, which allow investors to gain exposure to broad equity markets, while differentiating their risk-return profiles," said Sara Petrcich, Managing Director and Head of Exchange Traded Funds and Structured Solutions, BMO Global Asset Management. "Buffer ETFs provide protection on the downside while Accelerator ETFs can enhance return potential with no additional risk. These innovative solutions combine the familiarity of an ETF with structured solutions that give investors a unique way to tailor their exposure to equity markets and help make progress on their financial goals."
- BMO Long Short Canadian Equity ETF (TSX: ZLSC) seeks to provide income and long-term capital appreciation, primarily by taking long and short positions in equity securities issued by Canadian companies. BMO Long Short Canadian Equity ETF will also invest excess cash in fixed income instruments or exposures. BMO Long Short Canadian Equity ETF may employ leverage to enhance returns, whereby the sum of long and short equity exposures will generally exceed 100 per cent.
- BMO Long Short US Equity ETF (TSX: ZLSU) seeks to provide income and long-term capital appreciation, primarily by taking long and short positions in equity securities issued by US companies. BMO Long Short US Equity ETF will also invest excess cash in fixed income instruments or exposures. BMO Long Short US Equity ETF may employ leverage to enhance returns, whereby the sum of long and short equity exposures will generally exceed 100 per cent.
- BMO S&P/TSX 60 Index ETF (TSX: ZIU) seeks to replicate, to the extent possible, the performance of a Canadian equity index, net of expenses. Currently, BMO S&P/TSX 60 Index ETF seeks to replicate, to the extent possible, the performance of the S&P/TSX 60 Index.
- BMO Canadian Banks Accelerator ETF (NEO: ZEBA) seeks to provide unitholders with income and approximately double (2x) the upside return of an index designed to give exposure to equity securities of diversified Canadian banks up to a cap (before fees, expenses and taxes), with approximately single exposure to the downside (before fees, expenses and taxes), over the Target Outcome Period under normal market conditions. BMO Canadian Banks Accelerator ETF can be held indefinitely, resetting at the end of each Target Outcome Period, approximately quarterly. The initial Target Outcome Period is the period commencing on the date of initial issuance and listing of Units of BMO Canadian Banks Accelerator ETF to on or about December 31, 2023. Following this initial Target Outcome Period, each subsequent Target Outcome Period will be a period of approximately one quarter from the first business day of January 2024.
- BMO USD Cash Management ETF (TSX: ZUCM andTSX: ZUCM.U) seeks to maximize current income, while at the same time preserving capital and maintaining liquidity, by providing unitholders exposure to high quality short term fixed income securities denominated in US dollars.
- BMO US Equity Accelerator Hedged to CAD ETF (NEO: ZUEA) seeks to provide unitholders with income and approximately double (2x) the upside return of an index designed to measure the large-cap segment of the US equity market up to a cap (before fees, expenses and taxes), with approximately single exposure to the downside (before fees, expenses and taxes), over the Target Outcome Period under normal market conditions. BMO US Equity Accelerator Hedged to CAD ETF can be held indefinitely, resetting at the end of each Target Outcome Period, approximately quarterly. The initial Target Outcome Period is the period commencing on the date of initial issuance and listing of Units of BMO US Equity Accelerator Hedged to CAD ETF to on or about December 31, 2023. Following this initial Target Outcome Period, each subsequent Target Outcome Period will be a period of approximately one quarter from the first business day of January 2024.
- BMO US Equity Buffer Hedged to CAD ETF – October (NEO: ZOCT) seeks to provide unitholders with income and appreciation (before fees, expenses and taxes) that matches to the extent possible the return of an index designed to measure the large-cap segment of the US equity market (the "Reference Index") up to a cap (before fees, expenses and taxes), while providing a buffer against the first 15 per cent (before fees, expenses and taxes) of a decrease in the market price of the Reference Index, over a period of approximately one year from the first business day of October of each year to on or about the last business day of September of the following year, referred to as the Target Outcome Period. The initial Target Outcome Period is the period commencing on the date of initial issuance and listing of Units of BMO US Equity Buffer Hedged to CAD ETF – October to on or about September 30, 2024. Following this initial Target Outcome Period, each subsequent Target Outcome Period will be a period of approximately one year from the first business day of October of each year to on or about the last business day of September of that year.
BMO Global Dividend Opportunities Fund has closed its initial offering of Active ETF Series units and today are listed and trading on the NEO Exchange.
New Active ETF Series of BMO Mutual Fund | Class of Units | Exchange and |
BMO Global Dividend Opportunities Fund | Active ETF | NEO: BGDV |
- BMO Global Dividend Opportunities Fund (Active ETF Series) (NEO: BGDV) seeks to increase the value of unitholders' investment over the long term by investing primarily in equity securities of companies from around the world that pay dividends or that are expected to pay dividends.
Collectively, BMO Canadian Banks Accelerator ETF, BMO US Equity Accelerator Hedged to CAD ETF and BMO US Equity Buffer Hedged to CAD ETF – October are referred to as the "Structured Outcome ETFs". The Structured Outcome ETFs aim to provide investors with a return over a specified target outcome period (each, a "Target Outcome Period").
An investor that purchases units of a Structured Outcome ETF other than on the first day of a Target Outcome Period and/or redeems or sells units of a Structured Outcome ETF prior to the end of a Target Outcome Period may experience results that are very different from the target outcomes sought by such Structured Outcome ETF for that Target Outcome Period. To achieve the intended target outcomes sought by a Structured Outcome ETF for a Target Outcome Period, an investor must hold units of the Structured Outcome ETF for that entire Target Outcome Period.
The Structured Outcome ETFs' website (www.bmoetfs.com) provides important information about the Structured Outcome ETFs (including Target Outcome Period start and end dates and the cap and buffer, as applicable, in respect of the Structured Outcome ETFs) as well as information relating to the potential outcomes of an investment in the Structured Outcome ETFs on a daily basis.
The price cap for the initial Target Outcome Period of each of the Structured Outcome ETFs (which was established at the time the Structured Outcome ETF purchased the applicable Converge Options) is as follows:
Structured Outcome ETF | Cap of Initial Target Outcome Period |
BMO Canadian Banks Accelerator ETF | 6.6%*, before fees, expenses and taxes |
BMO US Equity Accelerator Hedged to CAD ETF | 7.0%*, before fees, expenses and taxes |
BMO US Equity Buffer Hedged to CAD ETF – | 10.5%, before fees, expenses and |
*Represents approximately double (2x) the return of the applicable Reference ETF.
Further information can be found at BMO ETF Centre.
S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and "TSX" is a trademark of TSX, Inc. These trademarks have been licensed for use by S&P Dow Jones Indices LLC and sublicensed to BMO Asset Management Inc. in connection with the ETF. The Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by BMO Asset Management Inc. in connection with the ETF. The ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, S&P, TSX, or their respective affiliates, and S&P Dow Jones Indices LLC, S&P, TSX and their respective affiliates make no representation regarding the advisability of trading or investing in such ETF.
Commissions, management fees and expenses (if applicable) all may be associated with investments in BMO ETFs and ETF Series of the BMO Mutual Funds. Please read the ETF facts or prospectus of the relevant BMO ETF or ETF Series before investing. BMO ETFs and ETF Series 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 ETFs or ETF Series of the BMO Mutual Funds, please see the specific risks set out in the prospectus. BMO ETFs and ETF Series 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., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal. ETF Series of the BMO Mutual Funds are managed by BMO Investments Inc., which is an investment fund 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.
®/™Registered trademarks/trademark of Bank of Montreal, used under licence.
BMO Exchange Traded Funds has been an ETF provider in Canada for more than 12 years, with over 100 strategies, over 25 per cent market share in Canada1, and $87.7 billion in assets under management. BMO ETFs are designed to stay ahead of market trends and provide compelling solutions to help advisors and investors. This includes a comprehensive suite of ETFs developed in Canada for Canadians, such as cost effective core equity ETFs following market leading indexes, and a broad range of fixed income ETFs; solution-based ETFs responding to client demand; and innovation with smart beta ETFs, as well as combining active and passive investing with ETF series of active mutual funds.
1 Morningstar, December 2022
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.25 trillion as of July 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single 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 inclusive society.
SOURCE BMO Financial Group
Media Contact: Aaron Sobeski, Toronto, [email protected], (416) 867-3996
Share this article