BMO Financial Group unveiled a significant expansion of its BMO Exchange Traded Funds product line on Monday.

The bank launched nine new ETFs, bringing the total offered by BMO to 13.

“We are excited to announce the expansion of our ETF product line. It is part of BMO’s commitment to providing our clients with the most diverse group of products, solutions, best education and support in the field of investments and a testament to our dedication to helping clients make sense of their finances,” said Gilles Ouellette, president and CEO, BMO private client group.

The new BMO ETFs, which trade on the Toronto Stock Exchange, are:

• BMO Short Federal Bond Index ETF (ZFS);
• BMO Short Provincial Bond Index ETF (ZPS);
• BMO Short Corporate Bond Index ETF (ZCS);
• BMO High Yield US Corporate Bond Hedged to CAD ETF (ZHY);
• BMO S&P/TSX Equal Weight Banks Index ETF (ZEB);
• BMO S&P/TSX Equal Weight Oil & Gas Index ETF (ZEO);
• BMO International Equity Hedged to CAD Index ETF (ZDM);
• BMO Emerging Markets Equity Index ETF (ZEM); and
• BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF (ZMT)

In designing BMO’s ETF offerings, the bank’s goal was to provide investors with exposures to asset classes that should be held in their portfolios long-term, according to Rajiv Silgardo, head of BMO ETFs. This is one reason the bank decided to introduce fixed income ETFs.

“When you think about your investment portfolio overall, ETFs can meet your needs not just in the equity part of it, which is traditionally where they’ve been, but also on the fixed income side of things,” said Silgardo.

BMO’s fixed income ETFs are focused on the short-term bond market, since the bank has witnessed heightened demand for shorter-term, liquid investment products amid continuing economic uncertainty, Silgardo said.

“For now, much of their appetite is at the short end of the bond market,” he said.

BMO’s ETFs are also designed to let investors more precisely allocate their investments to specific areas within the fixed income and equity asset classes. For instance, the bank divided the short term fixed income class into three separate ETF products to allow investors to control the type of fixed income exposure they have. Investors seeking higher yield could invest in the Short Corporate Bond ETF, while those seeking higher credit quality could allocate more funds to the Short Federal Bond ETF or the Short Provincial Bond ETF. Or, investors could invest in a combination of the three ETFs.

“It gives them exposure to the fixed income market, but also allows them to invest in a much more precise way than had been available previously,” said Silgardo.

Similarly, BMO’s three new industry ETFs let investors channel their equity holdings to specific sectors: oil and gas, base metals, or banking.

“The idea of each of these was to give investors the ability to more precisely implement their views about a particular industry or a particular sector of the equity market that they want to invest in,” Silgardo said.

The International Equity ETF and the Emerging Markets Equity ETF are designed to act as core positions in investors’ portfolios, and the High Yield US Corporate Bond is designed to give investors exposure to non-investment grade bonds that provide higher yield than most investment grade bonds. This type of ETF was not previously available to Canadian investors, according to Silgardo.

The ETFs are managed and administered by Jones Heward Investment Counsel Inc., a wholly owned indirect subsidiary of Bank of Montreal.

IE