Liquid Alternatives: New Fixed Income ETFs From BMO Now Trading in Toronto

February 12, 2020 | Latest News, Liquid Alternatives, News
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The three new ETFs include a first-of-its-kind one that is based on mortgage-backed securities.

Two of these new fixed-income ETFs from BMO Global Asset Management invest in corporate bonds. The third invests in mortgage-backed securities. (InvestmentExecutive)

“Building off the success of our fixed-income suite, we now offer more solutions for investors to precisely position their portfolios within a certain credit range,” said Mark Raes, Head of Product, BMO Global Asset Management.

“Additionally, we have launched Canada’s first MBS ETF, which provides unique exposure to a segment of the MBS market fully guaranteed by the Canada Mortgage and Housing Corporation (CMHC). These listings further demonstrate our commitment to the bond market, where ETFs bring added liquidity and trading efficiency for fixed income positioning.”

BMO BBB Corporate Bond Index ETF (ZBBB)

This ETF invests in one to 10 year BBB rated corporate bonds. It, therefore, allows investors to segment credit exposure while providing a yield pickup.

Further, it seeks to replicate the performance of the FTSE Canada 1-10 year A+ Corporate Bond Index, net of expenses. Securities held in the Index are corporate bonds issued domestically in Canada in Canadian dollars, with a BBB rating.

The ETF has an expense ratio of 0.17%. Assets under management are $4.5 million.

BMO High Quality Corporate Bond Index ETF (ZQB)

This ETF invests in one to 10 year A and above rated corporate bonds. It, therefore, provides exposure to higher quality Canadian credit, allowing investors to boost their portfolio credit quality.

It will replicate, to the extent possible, the performance of the FTSE Canada 1-10 Year A+ Corporate Bond Index, net of expenses.

Securities held in the Index are corporate bonds issued domestically in Canada in Canadian dollars, with a rating of A or better.

Moreover, the ETF has an expense ratio of 0.11% and net assets of $4.5 million.

BMO Canadian MBS Index ETF (ZMBS)

This ETF invests in pools of mortgage-backed securities insured under the Canadian National Housing Act. Moreover, the Canada Mortgage and Housing Corporation guarantees these securities.

The pools each have a term to maturity greater than one year and a minimum amount outstanding of $100 million.

The BMO Canadian MBS Index ETF will replicate, to the extent possible, the performance of the FTSE Canada NHA MBS 975 Index, net of expenses.

Finally, the ETF has an expense ratio of 0.17%. Assets under management are $2.25 million.

Related Story:  Liquid Alternatives: CI Investments Floats Three Liquid Alt ETFs in Modernization Drive

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