New BMO ETFs

Discuss your favourite picks, broker, and trading or investment style.
User avatar
parvus
Veteran Contributor
Veteran Contributor
Posts: 10014
Joined: 20 Feb 2005 16:09
Location: Waiting for the real estate meltdown on Rua Açores.

Post by parvus »

BMO Asset Management Announces Filing of Preliminary Prospectus for BMO Exchange Traded Funds
The BMO ETFs are as follows:

<<
- BMO Canadian Government Bond ETF
- BMO Canadian Equity ETF
- BMO US Equity ETF
- BMO International Equity ETF
- BMO Emerging Markets Equity ETF
- BMO Global Infrastructure ETF
- BMO Dow Jones Industrial Average ETF
>>
With the exception of the bond ETF, Dow Jones indexes are used.

Code: Select all

Annual Management Fee            (%)
BMO Canadian GovernmentBond ETF  0.325
BMO Canadian Equity ETF          0.150
BMO US Equity ETF                0.230
BMO International Equity ETF     0.475
BMO Emerging Markets Equity ETF  0.535
BMO Global Infrastructure ETF    0.525
Wovon man nicht sprechen kann, darüber muß man schweigen — a wit
Imagefiniki, the Canadian financial wiki Your go-to guide for financial basics
Image
User avatar
Bylo Selhi
Veteran Contributor
Veteran Contributor
Posts: 29493
Joined: 16 Feb 2005 10:36
Location: Waterloo, ON
Contact:

Post by Bylo Selhi »

There's nothing new here unless they truly deliver on the "BMO ETFs will be very cost competitive" and they mean compared to BGI and Vanguard, not Claymore's Advisor class.

Watch this space.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
queerasmoi
Veteran Contributor
Veteran Contributor
Posts: 3385
Joined: 27 May 2008 16:25

Post by queerasmoi »

Feh, the US equity ETF is (once again) hedged to the Canadian dollar. Do not want.

However, it doesn't leave any indication that the international ETFs are currency-hedged, and the International index is competitive with iShares XIN which has a 0.49% MER. It's based on a "World ex-US" index which may be very useful to Canadian investors - plus there is no double-taxation issue arising from holding an international ETF in the US. Canadians who buy Vanguard's All-World ex-US have to deal with both internal and external withholding taxes, *plus* double-taxation on the small part of the index that includes Canada.
sjhoffman
Newcomer
Newcomer
Posts: 9
Joined: 20 Feb 2005 19:36
Location: Toronto

BMO to launch ETFs

Post by sjhoffman »

Thoughts on this announcement from BMO?

TORONTO, February 12, 2009 – BMO Asset Management today announced that a preliminary prospectus has been filed with the securities regulatory authorities in Canada with respect to seven new BMO exchange traded funds (ETFs), including the BMO Global Infrastructure ETF.

The BMO ETFs are as follows:

BMO Canadian Government Bond ETF
BMO Canadian Equity ETF
BMO US Equity ETF
BMO International Equity ETF
BMO Emerging Markets Equity ETF
BMO Global Infrastructure ETF
BMO Dow Jones Industrial Average ETF
Jones Heward Investment Counsel Inc. (Jones Heward), an operating company within BMO Asset Management, will be the manager of the BMO ETFs.

The BMO Canadian Government Bond ETF has been designed to replicate, to the extent possible, the performance of the Citigroup Canadian Government Bond Index.
The BMO Canadian Equity ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Canada Index.
The BMO US Equity ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones U.S. Market Index.
The BMO International Equity ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones World Developed ex-U.S. Index.
The BMO Emerging Markets Equity ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones World Emerging Markets Index.
The BMO Global Infrastructure ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Brookfield Global Infrastructure Index.
The BMO Dow Jones Industrial Average ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Industrial Average.
A preliminary prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in all provinces and territories of Canada. The preliminary prospectus is still subject to completion or amendment. Copies of the preliminary prospectus may be obtained from your financial advisor or from Jones Heward at www.bmo.com/etfs. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.
User avatar
scomac
Veteran Contributor
Veteran Contributor
Posts: 7788
Joined: 19 Feb 2005 09:47
Location: The Gateway to Wine Country

Post by scomac »

Just wait until Investors' Group launches their proprietary version of ETFs. :wink:
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
randomwalker
Veteran Contributor
Veteran Contributor
Posts: 2392
Joined: 14 Apr 2005 20:55

Post by randomwalker »

I'm sure a few here remember when TD had a handful of ETFs trading in Toronto but euthanized them due to investor lack of interest.
squash500
Contributor
Contributor
Posts: 837
Joined: 26 Dec 2007 21:48

Post by squash500 »

scomac wrote:Just wait until Investors' Group launches their proprietary version of ETFs. :wink:

Yeah with about a 5% mer per etf :P .
User avatar
scomac
Veteran Contributor
Veteran Contributor
Posts: 7788
Joined: 19 Feb 2005 09:47
Location: The Gateway to Wine Country

Post by scomac »

squash500 wrote:
scomac wrote:Just wait until Investors' Group launches their proprietary version of ETFs. :wink:

Yeah with about a 5% mer per etf :P .
No...I would think that 125-150 basis points on top would be about enough to seal the deal. They would even end up being competitive with De Goey at that rate. :wink:
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Doug
Contributor
Contributor
Posts: 778
Joined: 02 Aug 2008 10:10

Post by Doug »

How much room is there in the Canadian market for ETFs? As mentioned by others, TD ETFs did not do well. ETFs that do not attract a large number of investors are less liquid resulting in larger bid ask spreads.
User avatar
scomac
Veteran Contributor
Veteran Contributor
Posts: 7788
Joined: 19 Feb 2005 09:47
Location: The Gateway to Wine Country

Post by scomac »

Doug wrote:How much room is there in the Canadian market for ETFs?
Lots if they come with hand holding free advice attached. :wink:
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Post by Shakespeare »

BMO Financial Group announces the launch of BMO Exchange Traded Funds (ETFs)
BMO ETFs (www.bmo.com/etfs)

- BMO Canadian Government Bond Index ETF (BGB) has been designed to
replicate, to the extent possible, the performance of the Citigroup
Canadian Government Bond Index.
- BMO Dow Jones Canada Titans 60 Index ETF (BCA) has been designed to
replicate, to the extent possible, the performance of the Dow Jones
Canada Titans 60 Index.
- BMO US Equity Index ETF (BUE) has been designed to replicate, to the
extent possible, the performance of the Dow Jones U.S. Large-Cap
Index (CAD hedged).
- BMO Dow Jones DiamondsSM Index ETF (BDJ) has been designed to
replicate, to the extent possible, the performance of the Dow Jones
Industrial Average (CAD hedged).
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
User avatar
Bylo Selhi
Veteran Contributor
Veteran Contributor
Posts: 29493
Joined: 16 Feb 2005 10:36
Location: Waterloo, ON
Contact:

Post by Bylo Selhi »

Just in time to compete with DominicDonald's folly :shock: :roll:
Sedulously eschew obfuscatory hyperverbosity and prolixity.
DanH
Veteran Contributor
Veteran Contributor
Posts: 2174
Joined: 21 Feb 2005 14:25
Contact:

Post by DanH »

Bylo Selhi wrote:Just in time to compete with DominicDonald's folly :shock: :roll:
Those Manu index funds cannot be puchased as stand alone funds. They will instead by included as part of Manulife's fund of fund products. :?
User avatar
Bylo Selhi
Veteran Contributor
Veteran Contributor
Posts: 29493
Joined: 16 Feb 2005 10:36
Location: Waterloo, ON
Contact:

Post by Bylo Selhi »

So why didn't they use ETFs, e.g. XIU (17bp), VTI (9bp) and CBO (25bp)? They'll need to attract a lot of assets in Simplicity, especially since "We look at them to make up about 20 per cent of the overall equity weighting in the portfolios" before they can index in-house at lower cost.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
squash500
Contributor
Contributor
Posts: 837
Joined: 26 Dec 2007 21:48

Post by squash500 »

DanH wrote:
Bylo Selhi wrote:Just in time to compete with DominicDonald's folly :shock: :roll:
Those Manu index funds cannot be puchased as stand alone funds. They will instead by included as part of Manulife's fund of fund products. :?
ISTM like another bad product for the investor :) . I'm not sure which is worse? Wrap accounts or dsc funds :? ?
queerasmoi
Veteran Contributor
Veteran Contributor
Posts: 3385
Joined: 27 May 2008 16:25

Post by queerasmoi »

squash500 wrote: ISTM like another bad product for the investor :) . I'm not sure which is worse? Wrap accounts or dsc funds :? ?
How about a DSC balanced fund that is a wrap of ETFs? ;)
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Post by Shakespeare »

BMO Financial Group Announces Significant Expansion of BMO Exchange Traded Funds (ETFs)
New BMO ETF Products (www.bmo.com/etfs)

- BMO Short Federal Bond Index ETF (ZFS)
- BMO Short Provincial Bond Index ETF (ZPS)
- BMO Short Corporate Bond Index ETF (ZCS)
- BMO High Yield US Corporate Bond Hedged to CAD ETF (ZHY)
- BMO S&P/TSX Equal Weight Banks Index ETF (ZEB)
- BMO S&P/TSX Equal Weight Oil & Gas Index ETF (ZEO)
- BMO International Equity Hedged to CAD Index ETF (ZDM)
- BMO Emerging Markets Equity Index ETF (ZEM)
- BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index
ETF (ZMT)

Existing ETFs

- BMO Canadian Government Bond Index ETF (ZGB) has been designed to
replicate, to the extent possible, the performance of the Citigroup
Canadian Government Bond Index.

- BMO Dow Jones Canada Titans 60 Index ETF (ZCN) has been designed to
replicate, to the extent possible, the performance of the Dow Jones
Canada Titans 60 Index.

- BMO US Equity Hedged to CAD Index ETF (ZUE) has been designed to
replicate, to the extent possible, the performance of the Dow Jones
U.S. Large-Cap Index (CAD hedged).

- BMO Dow Jones Industrial Average Hedged to CAD Index ETF (ZDJ) has
been designed to replicate, to the extent possible, the performance
of the Dow Jones Industrial Average (CAD hedged).
Well, as a consumer it's nice that they're trying. But I really doubt that they can break into this market.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
User avatar
Norbert Schlenker
Veteran Contributor
Veteran Contributor
Posts: 7960
Joined: 16 Feb 2005 09:56
Location: An Argument Surrounded By Water
Contact:

Post by Norbert Schlenker »

BMO S&P/TSX Equal Weight Banks Index ETF (ZEB)
MER 0.55%

You have got to be kidding.
Nothing can protect people who want to buy the Brooklyn Bridge.
bwalter
Contributor
Contributor
Posts: 303
Joined: 17 Sep 2009 18:19

Post by bwalter »

Norbert Schlenker wrote:
BMO S&P/TSX Equal Weight Banks Index ETF (ZEB)
MER 0.55%

You have got to be kidding.
That certainly does seem like a high price to pay to hold 5 stocks and keep them equally weighted.
User avatar
country squire
Newcomer
Newcomer
Posts: 7
Joined: 23 Oct 2009 19:48

Post by country squire »

bwalter wrote:
Norbert Schlenker wrote:
BMO S&P/TSX Equal Weight Banks Index ETF (ZEB)
MER 0.55%

You have got to be kidding.
That certainly does seem like a high price to pay to hold 5 stocks and keep them equally weighted.
Make that 6. Can't forget National Bank.
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Post by Shakespeare »

country squire wrote:Make that 6. Can't forget National Bank.
Yep.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Post by ockham »

I don't understand the obsession with currency hedging. What BMO could have offered was something we actually need, inexpensive Canadian domiciled non-currency hedged foreign market ETFs. Too bad.
bwalter
Contributor
Contributor
Posts: 303
Joined: 17 Sep 2009 18:19

Post by bwalter »

country squire wrote:
bwalter wrote:
Norbert Schlenker wrote: MER 0.55%

You have got to be kidding.
That certainly does seem like a high price to pay to hold 5 stocks and keep them equally weighted.
Make that 6. Can't forget National Bank.
Guess I need to learn to count. :lol:
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13267
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Post by Peculiar_Investor »

ockham wrote:I don't understand the obsession with currency hedging. What BMO could have offered was something we actually need, inexpensive Canadian domiciled non-currency hedged foreign market ETFs. Too bad.
Contrast that with what they did offer, something they need, fee generating for them, taking advantage to the rush to ETFs and all the financial press coverage.
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
queerasmoi
Veteran Contributor
Veteran Contributor
Posts: 3385
Joined: 27 May 2008 16:25

Post by queerasmoi »

Short corporate bond ETF could be interesting... compare to Claymore's CBO. MER of 30 bp (CBO is 25), similar duration but more holdings (43 for ZCS vs 25 for CBO). Is the extra diversity worth 5 bp?

ZHY, "High Yield US Corporate Bond Hedged to CAD", is actually QUITE a unique offering. In fixed-income it makes much more sense to me to throw in currency hedging for foreign investments than with equities. So even at a steeper 65 bp it's not really got any ETF competitors. BUT before you get too excited, the holdings consist of 101.29% JNK (a SPDR ETF in the US) and -1.29% cash (??).

I would be concerned, if ZHY merely holds JNK, that the 15% withholding tax on distributions will be locked up internally, meaning that if I hold ZHY in a tax-sheltered account I will lose out on that 15% completely (whereas in RRSP, JNK would be subject to no withholding).
Post Reply