In last weekend’s column in The Globe and Mail, Rob Carrick noted that Bank of Montreal has filed papers to introduce new ETFs in Canada. So, I went digging on Sedar and sure enough, found the preliminary prospectus. BMO is planning to introduce seven new ETFs:
- BMO Canadian Bond ETF (Ticker: ZGB; MER = 0.325%) tracks the Citigroup Canadian Government Bond Index. I couldn’t find a webpage on this obscure index but it sounds like a broad market index of Canadian Government bonds of medium duration.
- BMO Canadian Equity ETF (Ticker: ZCN; MER = 0.15%) tracks the Dow Jones Canada Index and provides a broad-market exposure to the Canadian stock market.
- BMO US Equity ETF (Ticker: ZUE; MER = 0.23%) tracks the Dow Jones U.S. Index, which is represents “the top 95% of U.S. companies based on float-adjusted market capitalization, excluding the very smallest and least-liquid stocks”.
- BMO International Equity ETF (Ticker: ZDM; MER = 0.475%) tracks the Dow Jones World Developed-Ex U.S. Index and provides exposure to Japan, UK, France, Germany, Switzerland and Australia.
- BMO Emerging Markets Equity ETF (Ticker: ZEM; MER = 0.535%) tracks 22 emerging markets.
- BMO Global Infrastructure ETF (MER = 0.525%) tracks 90 stocks that “exhibit strong infrastructure characteristics”. Enbridge (TSX: ENB) is one of the top five holdings.
- BMO Dow Jones Industrial Average ETF (Ticker: ZEJ; MER = 0.23%) tracks the famed Dow Jones index of 30 large-cap, US stocks.
Some of the new BMO ETFs are likely to be of interest to Canadian investors. The BMO US Equity ETF is significantly more expensive than the Vanguard Total Market ETF (VTI) but is likely to be a significant competitor to the iShares CDN S&P 500 Hedged to Canadian Dollars Index Fund (XSP). Unfortunately, the BMO International Equity ETF has additional exposure to our stock market making it less attractive to Canadian investors. The BMO Emerging Market ETF is again more expensive than the Vanguard Emerging Markets ETF (VWO) but provides an interesting, Canadian-dollar denominated alternative for Canadian investors worried about US estate tax implications.
It is interesting to see that Bank of Montreal is jumping back in the ETF market abandoned by TD Bank some years back. It would be interesting to see if these new ETFs take off in a meaningful way.
Updated on 2009/10/26 with ticker symbols. More information available on the BMO ETFs website.