- New Buffer ETF offers downside protection for
investors
TORONTO, July 2, 2024
/CNW/ - BMO Asset Management Inc. ("BMOAM Inc."), the
manager of the BMO ETFs, today announced the launch of BMO US
Equity Buffer Hedged to CAD ETF – July.
BMO US Equity Buffer Hedged to CAD ETF – July (Cboe CA: ZJUL)
has closed its initial offering of exchange traded units and is
today listed and trading on Cboe Canada Inc.
BMO US Equity Buffer Hedged to CAD ETF –
July
BMO US Equity Buffer Hedged to CAD ETF – July
seeks to provide unitholders with income and appreciation (before
fees, expenses and taxes) that matches to the extent possible the
return of a Reference Index designed to measure the large-cap
segment of the US equity market (the "Reference Index") up
to a cap (before fees, expenses and taxes), while providing a
buffer against the first 15% (before fees, expenses and taxes) of a
decrease in the market price of the Reference Index, over a period
of approximately one year from the first business day of July of
each year to on or about the last business day of June of the
following year, referred to as the Target Outcome Period. The
current Reference Index is the S&P 500 Hedged to Canadian
Dollars Index.
In order to seek to achieve its investment
objectives, BMO US Equity Buffer Hedged to CAD ETF – July will
primarily invest in BMO S&P 500 Hedged to CAD Index ETF (the
"Reference ETF"). BMO US Equity Buffer Hedged to CAD ETF –
July may also invest in Converge Options that reference the price
return of the Reference ETF to employ a "target outcome strategy".
Target outcome strategies seek to produce predetermined investment
outcomes based upon the performance of the Reference ETF during the
applicable Target Outcome Period. The predetermined outcomes sought
by BMO US Equity Buffer Hedged to CAD ETF – July, which include a
buffer against the first 15% (before fees, expenses and taxes) of
decrease in the market price of Reference ETF and a predetermined
upside cap (before fees, expenses and taxes), are based on the
return of the Reference ETF over the Target Outcome Period.
Each Target Outcome Period will be a period of
approximately one year from the first business day of July of each
year to on or about the last business day of June of the following
year.
The Reference ETF, BMO S&P 500 Hedged to CAD
Index ETF, seeks to replicate, to the extent possible, the
performance of a broad U.S. stock market index, net of expenses.
Currently, BMO S&P 500 Hedged to CAD Index ETF seeks to
replicate the performance of the S&P 500 Hedged to Canadian
Dollars Index. The investment strategy of BMO S&P 500 Hedged to
CAD Index ETF is currently to obtain exposure to the performance of
the S&P 500 Hedged to Canadian Dollars Index by investing in
assets such as ETFs, mutual funds or other investment funds, ADRs
or derivative instruments. Currently, BMO S&P 500 Hedged to CAD
Index ETF primarily invests in BMO S&P 500 Index ETF and uses
derivative instruments to hedge back to the Canadian dollar. As an
alternative to or in conjunction with primarily investing in assets
such as ETFs, mutual funds or other investment funds, ADRs or
derivative instruments, BMO S&P 500 Hedged to CAD Index ETF may
invest in and hold the constituent securities of the S&P 500
Hedged to Canadian Dollars Index. The Portfolio Manager may also
use a sampling methodology in selecting investments for BMO S&P
500 Hedged to CAD Index ETF to obtain exposure to the performance
of the S&P 500 Hedged to Canadian Dollars Index.
About Structured Outcome ETFs
BMO US Equity Buffer Hedged to CAD ETF – July is the newest
addition to BMO ETFs' Structured Outcome ETFs. Collectively, BMO
Canadian Banks Accelerator ETF, BMO US Equity Accelerator Hedged to
CAD ETF, BMO US Equity Buffer Hedged to CAD ETF – January, BMO US
Equity Buffer Hedged to CAD ETF – April, BMO US Equity Buffer
Hedged to CAD ETF – July and BMO US Equity Buffer Hedged to CAD ETF
– October are referred to as the "Structured Outcome ETFs". The
Structured Outcome ETFs aim to provide investors with a return over
a specified target outcome period (each, a "Target Outcome
Period").
An investor that purchases units of a Structured Outcome ETF
other than on the first day of a Target Outcome Period and/or
redeems or sells units of a Structured Outcome ETF prior to the end
of a Target Outcome Period may experience results that are very
different from the target outcomes sought by such Structured
Outcome ETF for that Target Outcome Period. To achieve the intended
target outcomes sought by a Structured Outcome ETF for a Target
Outcome Period, an investor must hold units of the Structured
Outcome ETF for that entire Target Outcome Period.
Please refer to the Structured Outcome ETFs' website
(https://www.bmogam.com/ca-en/products/structured-outcomes/ ) for
important information about the Structured Outcome ETFs' Target
Outcome Period start and end dates and the applicable cap and
buffer.
Further information can be found at BMO ETF Centre.
Commissions, management fees and expenses all may be associated
with investments in exchange traded funds. Please read the ETF
Facts or prospectus of the BMO ETFs before investing. Exchange
traded funds are not guaranteed, their values change frequently,
and past performance may not be repeated.
For a summary of the risks of an investment in the BMO ETFs,
please see the specific risks set out in the BMO ETF's
prospectus. BMO ETFs trade like stocks, fluctuate in market
value and may trade at a discount to their net asset value, which
may increase the risk of loss. Distributions are not guaranteed and
are subject to change and/or elimination.
BMO ETFs are managed by BMO Asset Management Inc., which is an
investment fund manager and a portfolio manager, and a separate
legal entity from Bank of Montreal.
"BMO (M-bar roundel symbol)" is a registered trademark of Bank
of Montreal, used under
licence.
About BMO Exchange Traded Funds (ETFs)
BMO Exchange
Traded Funds has been an ETF provider in Canada for 15
years, with over 100 strategies, over 22 per cent market share
in Canada, and $107 billion in assets under
management1. BMO ETFs are designed to stay ahead of
market trends and provide compelling solutions to help advisors and
investors. This includes a comprehensive suite of ETFs developed
in Canada for Canadians, such as cost-effective core
equity ETFs following market leading indexes, and a broad range of
fixed income ETFs; solution-based ETFs responding to client demand;
and innovation with smart beta ETFs, as well as combining active
and passive investing with ETF series of active mutual funds.
1Morningstar, May 2024
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North
America by assets, with total assets of $1.4
trillion as of April 30, 2024. Serving customers for 200
years and counting, BMO is a diverse team of highly engaged
employees providing a broad range of personal and commercial
banking, wealth management, global markets and investment banking
products and services to 13 million customers
across Canada, the United
States, and in select markets globally. Driven by a single
purpose, to Boldly Grow the Good in business and life,
BMO is committed to driving positive change in the world, and
making progress for a thriving economy, sustainable future, and
inclusive society.
SOURCE BMO Financial Group