BMO Global Asset Management Introduces ETFs in Europe
OREANDA-NEWS. BMO Global Asset Management, a part of BMO Financial Group, today launched its first Exchange Traded Funds (ETFs) in Europe, solidifying its position as a global provider of investment solutions focused on meeting the evolving needs of investors. In so doing, BMO becomes the first Canadian bank to offer ETFs in Europe.
The nine ETFs, listed on the London Stock Exchange and designed specifically for UK and European investors, include four global corporate bond ETFs to help them diversify their exposure to global investment grade corporate bonds and high yield bonds, and five equity ETFs focused on generating high quality income for investors.
"Establishing our ETF offering in Europe is a key strategic milestone for us as we continue to expand across the region," said Richard Wilson, CEO, BMO Global Asset Management (EMEA). "We are very proud of our track record of developing relevant, innovative and client-focused products. Since the launch of the BMO Global Asset Management brand in Europe earlier this year, we have successfully brought our investment expertise to help new clients in new markets. Building on this momentum, we have used our experience managing ETFs in Canada and Hong Kong to develop and deliver a tailored offering for European investors, marking another step in delivering on the ambitious plans we have for the business."
BMO Global Asset Management is the fastest growing, and the second largest, provider of ETFs in Canada with more than 60 different ETFs. Expanding on this success, the firm launched three ETFs in Hong Kong in 2014.
Included among the nine new ETFs are three global corporate bond ETFs across a range of maturity bands1. These building blocks are designed to give investors the ability to implement a more precise positioning in an uncertain interest rate environment, allowing investors to tailor their exposure more flexibly across the yield curve and express their own views on interest rates. The three global corporate bond ETFs and a global high yield ETF track the Barclays Very Liquid Index (VLI), a subset of the Barclays Global Aggregate Bond Index. The Barclays Global Corporate VLI applies filters to exclude more illiquid bond issues.
"Our bond ETFs provide investors with the ability to diversify their exposure through global corporate bonds and high yield bonds," said Kevin Gopaul, Head of ETFs, BMO Global Asset Management "These are the first ETFs to offer a range of specific global corporate bond maturity bands, allowing investors to position their portfolios more precisely on the yield curve."
In addition to the bond ETFs, BMO Global Asset Management is introducing five equity ETFs in a new 'Income Leaders' range. Together with index provider MSCI, BMO Global Asset Management developed new equity indices, which apply filters to select the companies with the highest quality scores and higher than average dividend yields. By identifying quality, the strategy aims to select the leading companies with long-term sustainable business models and clear competitive advantages. Screening for higher than average dividend yields means having the potential to provide investors with a sustainable income stream.
"We align ourselves with investor needs in our equity products by focussing on yield, quality and volatility," noted Mr. Gopaul. "Low yields and uncertainty around interest rates are causing investors to review their portfolios. In this challenging environment, investors can look to ETFs to deliver yield and help in the implementation of more precise portfolio construction."
The nine ETFs are listed in sterling and those that invest in non-sterling investments are offered as sterling-hedged funds to mitigate this currency risk.
Currency fluctuations often have a meaningful impact on portfolio returns. Hedging currency risk can significantly reduce the return volatility of investments, giving investors better risk control; by removing currency volatility, returns can be attributed solely to investment performance.
An Experienced Team
The ETFs are managed by BMO Global Asset Management's London-based team who are experienced in index and factor-based investing. The portfolio management team will leverage BMO Global Asset Management's award winning ETF capabilities in Canada and Hong Kong.
The ETFs are UCITS funds, registered in Dublin under the Irish Collective Asset management Vehicle ("ICAV") structure. The official market makers are BNP Paribas and Jane Street.
About BMO Global Asset Management
BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, trust and custody services including BMO Global Asset Management (EMEA).
BMO Global Asset Management is a global investment manager delivering service excellence from our four major investment centres in London, Toronto, Chicago and Hong Kong through 24 offices in 14 countries with more than US$244 billion in assets under management (31 July 2015). It includes a network of world-class boutique managers: BMO Real Estate Partners, LGM Investments, Monegy Inc., Pyrford International Ltd., and Taplin, Canida & Habacht LLC.
BMO Global Asset Management has been recognised by Pension & Investments as one of the world's largest 100 asset managers based on combined assets under management as of 31 December 2014 and is a signatory of the United Nations-supported Principles for Responsible Investment initiative (UN PRI).