Product roundup: BMO to launch its first Canadian Depository Receipts

The products are subject to final approval by Cboe Canada. Once they are listed on the exchange, BMO will become the second Big Six bank to offer CDRs. Canadian Imperial Bank of Commerce (CIBC) was first to launch these products in Canada in July 2021.

“If you want access to global companies in Canadian dollars without worrying about currency fluctuations, CDRs represent a great way to achieve those objectives,” said David Hudson, head of structured solutions with BMO Global Asset Management, who helped CIBC launch its first CDRs.

BMO’s new offerings are slated to roll out in two batches.

The Europe-based Mercedes-Benz (Cboe: MB) and Nestlé (Cboe: NEST) are slated to launch on Feb. 6. Meanwhile, the CDRs investing in Japan’s Toyota (Cboe: TOYM), Honda (Cboe: HNDA) and Nintendo (Cboe: NTDO) are slated to launch on Feb. 10.

The CDRs will be priced at approximately $10 each.

Hudson expects the products to have a similar trajectory to ETFs, which grew significantly in both assets and offerings over the past 15 years.

“I think there’s going to be a lot of innovation in the next three to five years. So now is a great time to launch and to get into the market,” he said.

BMO’s announcement comes just days after CIBC announced the imminent launch of the first CDRs that invest in Europe-based companies.

CIBC’s new CDRs, which invest in German companies Allianz SE, Bayerische Motoren Werke AG (BMW), SAP SE and Siemens AG, began trading on Friday. They include:

• Allianz CDR (Cboe: ALZ)
• BMW CDR (Cboe: BMW)
• Mercedes-Benz CDR (Cboe: BENZ)
• SAP CDR (Cboe: SAPS)
• Siemens CDR (Cboe: SMNS)

This brings the bank’s CDR offerings count to 70.

Both banks said they plan to expand their CDR offerings. This comes at a time when the Canadian dollar is trading at lows not seen in years.

3iQ looks to be first Solana ETF provider

3iQ Corp. (3iQ) has submitted preliminary prospectuses with Canadian securities regulators to list the first ETFs that provide exposure to cryptoassets Solana and XRP, it said Tuesday.

The global asset manager said the 3iQ Solana Staking ETF and the 3iQ XRP ETF would invest in long-term holdings of Solana and XRP, respectively, which would be purchased from digital asset trading platforms and over-the-counter counterparties.

The funds would offer investors a “convenient and safer alternative” to investing directly in Solana and XRP, 3iQ said, and are pending approval to be listed on the Toronto Stock Exchange.

Franklin Templeton looks beyond U.S. large-cap equity market

On Thursday, Franklin Templeton Canada launched an ETF for Canadians looking for U.S. exposure beyond large-cap equities.

The Franklin U.S. Mid Cap Multifactor Index ETF (Cboe: FMID) invests in “established U.S. businesses using a multi-factor approach with a focus on high quality and value to help enhance returns over passive U.S. mid-cap indices,” said Ahmed Farooq, senior vice-president, head of retail ETF distribution with Franklin Templeton Canada, in a release.

The fund has a 0.3% management fee.

Fidelity launches quantitative mutual funds, ETFs

Leveraging its quantitative and fundamental research, Fidelity Investments Canada ULC (Fidelity) expanded its product lineup on Tuesday with three new funds.

They include:

• Fidelity Absolute Income Fund and its ETF series (TSX: FCAB/FCAB.U), which invest primarily in a mix of fixed-income securities of U.S. issuers and other issuers from around the world.
• Fidelity Advanced U.S. Equity Fund and its ETF series (TSX: FAUS/FAUS.U), which invest primarily in equity securities of U.S. companies.
• Fidelity Core U.S. Bond ETF (TSX: FCUB/FCUB.U), which invests primarily in U.S. investment-grade fixed-income securities.

Fidelity’s ETF business now consists of 48 investing strategies, with $12 billion in assets under management, the firm said in a release.

Hamilton ETFs expands offerings

Hamilton Capital Partners Inc. (Hamilton ETFs) has expanded its offerings, with five new ETFs that are designed to replicate the performance of different indexes, net of fees and expenses.

They include:

• Hamilton Champions Enhanced Canadian Dividend ETF (TSX: CWIN), which is designed to replicate the Solactive Canada Dividend Elite Champions Index. The index provides exposure to an equal-weight portfolio of blue-chip Canadian companies with a “long history” of rising dividends and comes with 25% cash leverage.
• Hamilton Champions Canadian Dividend Index ETF (TSX: CMVP), which has the same features as CWIN, except the 25% cash leverage.
• Hamilton Champions Enhanced U.S. Dividend ETF (TSX: SWIN), which is designed to replicate the Solactive United States Dividend Elite Champions Index. The index provides exposure to an equal-weight portfolio of blue-chip U.S. companies with 25 years or more of rising dividends. The ETF is hedged to the Canadian dollar and comes with 25% cash leverage.
• Hamilton Champions U.S. Dividend Index ETF (TSX: SMVP), which has the same features as SWIN, except the 25% cash leverage.
• Hamilton Canadian Financials Index ETF (TSX: HFN), which seeks to replicate the Solactive Canadian Financials EqualWeight Index. The index provides exposure to an equal-weight portfolio of the 12 largest Canadian financial services companies.

Hamilton ETFs said the funds will have an annual management fee of 0% until at least Jan. 31, 2026.

Mackenzie introduces global equity funds

On Jan. 21, Mackenzie Investments launched two new global equity mutual funds that aim to provide higher income and steadier returns than traditional equity funds.

The Mackenzie Global Dividend Enhanced Yield Fund seeks to “deliver stable cash flow and growth by investing in a combination of equity securities of issuers anywhere in the world, as well as writing cash-covered puts and covered calls,” the firm said in a release.

The Mackenzie Global Dividend Enhanced Yield PLUS Fund is a liquid alternative mutual fund that has a similar investment strategy, while applying leverage “to enhance cash flow and capital appreciation,” the release said.

The funds are managed by Mackenzie’s global equity and income team and both have a management fee of 0.8%.

Dynamic Funds taps into tech sector

Dynamic Funds has introduced an active ETF that invests in a portfolio of primarily equity securities of companies that can benefit from innovative technologies.

The Dynamic Active Innovation and Disruption ETF (TSX: DXID) and a U.S.-dollar version (TSX: DXID.U) began trading on Jan. 22.

The fund is managed by Noah Blackstein, vice-president and senior portfolio manager with Dynamic Funds, who has decades of investment experience managing U.S. and global growth mutual funds, hedge funds and liquid alternative mutual funds, the firm said in a release.

The ETF has a 0.7% management fee.