BMO Launches New Canada, U.S. ETFs

by on June 5, 2009 | ETFs Mentioned:

BMO Financial Group launched four ETFs on the Toronto Stock Exchange Thursday, making the company the first major Canadian financial group to offer a family of ETFs. The new ETFs offer exposure to two major markets and three asset classes. The funds are:

  • BMO Dow Jones Canada Titans 60 Index (BCA): Will track the Dow Jones Canada Titans 60 Index.
  • BMA Dow Jones Diamonds Index (BDJ): Will track the Dow Jones Industrial Average.
  • BMO U.S. Equity Index (BUE): Will track the Dow Jones U.S. Large-Cap Index.
  • BMO Canadian Government Bond Index (BGB): Will track the Citigroup Canadian Government Bond Index.

Both BDJ and BUE will hedge their exposure to U.S. dollars. Commenting on the launch of the ETFs, BMO president and CEO Gilles Oullette noted, “we are pleased to provide a home-grown Canadian investment option that can help investors achieve their financial goals.”

BMO’s new ETFs will likely compete with several existing Canadian iShares products for investor funds. BCA is similar to iShares’ CDN Large Cap 60 Index, and BGB follows an index similar to the one tracked by iShares CDN DEX All Government Bond Index. BDJ will compete directly with State Street‘s DIA, while BUE is similar to ELR. Expense ratios on the new BMO funds range from 0.15% to 0.23%, making their costs comparable to competing funds. State Street and iShares funds, however, are well-established funds with high levels of liquidity, an obstacle BMO’s products will have to overcome.

Three additional BMO ETFs have received final prospectus approval from regulators and will likely be launched in coming months. According to Oullette, “this is the first phase of our ETF offering, with additional products to come. Based on the popularity of ETFs world-wide, we anticipate this will contribute to the growth of BMO’s wealth management business.”

View MBO’s press release here.