New yield ETFs also added to firm’s shelf of income solutions
BMO Asset Management has introduced a raft of nine new ETFs, including seven indexed ESG ETFs that cover stocks and bonds.
“As an asset manager we have a responsibility to drive and encourage positive change, from active ownership and ESG integration across investments, to product development,” said Kevin Gopaul, global head of ETFs, BMO Global Asset Management. “This launch of ESG ETFs delivers the full range of solutions and an all-in-one-basket across broad markets that aligns with BMO's responsible investing strategy.”
Based on initial results of its ESG Beliefs and Behaviours Survey, BMO Asset Management said that 78% of high-net-worth and high-income individuals are ESG-leaning; 22% they actively invest in ESG, while 72% strongly agreed that companies can make a profit while leaving a positive impact. In addition, 68% strongly agreed that companies should be held to account for good management and sustainable business practices.
The new ESG ETFs, which are now trading on the TSX, include:
- BMO Balanced ESG ETF (ZESG) – Canada’s first ESG asset-allocation ETF, it provides one-ticket, low-cost access to a balanced portfolio of 60% equity and 40% fixed income securities;
- BMO MSCI Global ESG Leaders Index ETF (ESGG), BMO MSCI Canada ESG Leaders Index ETF (ESGA), BMO MSCI EAFE ESG Leaders Index ETF (ESGE), and BMO MSCI USA ESG Leaders Index ETF (ESGY) – Delivering ESG exposure through the best-in-class approach of the MSCI ESG Leaders Indexes, these ETFs are said to target the top 50% ESG-rated equities within sectors and industries while excluding controversial industries such as alcohol, gambling, tobacco, and weapons;
- BMO ESG Corporate Bond Index ETF (ESGB) and BMO ESG US Corporate Bond Hedged to CAD Index ETF (ESGF) – Focus on investment-grade corporate bond issuers with the highest MSCI ESG ratings
BMO Asset Management also enhanced its shelf of fixed-income offerings with two additional yield ETFs:
- BMO Global High Dividend Covered Call ETF (ZWG) – investing in high-dividend securities, the ETF strategy includes some ESG integration and builds off the firm’s existing covered-call methodology; and
- BMO Premium Yield ETF (ZPAY, ZPAY.U, ZPAY.F) – a yield solution that invests in a portfolio of large-cap U.S. equities combined with derivative strategies to determine equity entry and exit strategies.
