BMO Launches Five New Globally Diversified ETFs With Sector and Thematic Focuses
These new offerings expand BMO's already impressive lineup of 184 ETFs.
As one of Canada's largest asset managers, BMO Exchange Traded Funds features one of the largest ETF lineups domestically. Currently, the firm operates 184 ETFs, which include the usual equity index, fixed-income and asset allocation ETFs, but also expands into more niche categories like equal-weighted sector, factor/smart-beta, covered call, and thematic equity.
On June 29th, the lineup expanded even further with the launch of five new actively managed ETFs, all of which possess a globally diversified focus. The new ETFs include the BMO Global Equity Fund (BGEQ), the BMO Global Health Care Fund (BGHC), the BMO Global Infrastructure Fund (BGIF), the BMO Global Innovators (BGIN) Fund, and the BMO Global REIT Fund (BGRT).
"For clients for exposure to global equities, we believe our team’s sector specialist model provides unique benefits for active investing," says Jeff Elliott, Ph.D., CFA, MBA, Team Lead, Global Equities. "The core of the 20 person BMO GAM Global Equity team has extensive expertise and has successfully worked together for almost a decade, and we are very excited to launch new active global solutions on BMO’s industry leading ETF platform.”
Here's all you need to know about these five new BMO ETFs:
BMO Global Equity (BGEQ)
BGEQ is the sector-agnostic option, intended for investors looking for broad actively managed exposure to global equities with BMO's team using fundamental analysis to pick stocks that appear to be undervalued and exhibiting superior earnings growth.
As part of the active management, BGEQ can use derivatives like options, futures, and swaps to hedge against losses, reduce volatility, or gain synthetic exposure to assets. The ETF can also invest in different underlying BMO funds. BGEQ charges a 0.75% expense ratio.
BMO Global Health Care (BGHC)
BGHC actively selects global healthcare sector equities, with the same focus on selecting stocks with favorable valuations and superior earnings growth as BGEQ does. As with BGEQ, BGHC will be able to invest in different underlying BMO funds and use derivatives to manage risk and reduce volatility.
In addition, BGHC can also engage in securities lending and repurchase transactions to earn additional income, as well as short sell stocks the manager believes is overvalued to manage volatility or profit from a downturn. BGEQ charges a 0.90% expense ratio.
BMO Global Infrastructure (BGIF)
BGIF's objective is twofold, targeting a mixture of dividend income and capital gains from global infrastructure equities and fixed-income investments. The ETF defines infrastructure as including transportation, energy, water, construction, hospital school, and prison industries to name a few.
Again, the ETF will be able to invest in derivatives to hedge risk and lend securities for income. This ETF would complement BMO's existing BMO Global Infrastructure Index ETF (ZGI), which is passively managed and has an equity-only focus. BGIF charges a 1.05% expense ratio.
BMO Global Innovators Fund (BGIN)
BGIN focuses on the "innovation" thematic mega-trend by targeting the stocks of global companies involved in what they term "the development of innovative products, processes or services". As with BGEQ, BGIN employs active management to select undervalued stocks with earnings growth potential.
Unlike some thematic innovation ETFs that only have a long-only bias, BGIN is able to employ short-selling to profit from market downturns. BGIN will also be able to engage in securities lending to enhance income and buy derivatives to hedge risk. The ETF charges a 0.95% expense ratio.
BMO Global REIT Fund (BGRT)
The Canadian REIT space tends to be fairly small and dominated by a few select companies, which can lead to concentration risk for investors looking for a REIT allocation. BGRT offers a globally diversified alternative, employing active management to select undervalued REITs with superior earnings growth.
Again, active management is a big focus here, with BGRT's team able to engage in securities lending, short-selling, and derivatives trade to enhance income, hedge downturns, and manage volatility. Any distributions are expected to be made quarterly. The ETF charges a 0.90% expense ratio.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
