New BMO ETFs

[travesty]

At least ZCN provides another low cost alternative to existing broad market Canadian ETFs such as XIU and XIC, for times when you want to swap for tax-loss purposes, or for distinguishing your investments over time for capital gains deferral purposes.

[DanH]

That certainly does seem like a high price to pay to hold 5 stocks and keep them equally weighted.

Make that 6. Can't forget National Bank.

What about Laurentian and Canadian Western?

[country squire]

That certainly does seem like a high price to pay to hold 5 stocks and keep them equally weighted.

Make that 6. Can't forget National Bank.

What about Laurentian and Canadian Western?

They aren't included in the S&P/TSX Equal Weight Diversified Bank Index (which ZEB is supposed to track).

[Contrarian]

I don't understand the obsession with currency hedging. What BMO could have offered was something we actually need, inexpensive Canadian domiciled non-currency hedged foreign market ETFs. Too bad.

Put all your money in US dollars and see how comfortable you feel as your networth bounces around. Most of your money will end up being spent in Canada on housing and canadian services. At least in my limited experience, it seems unsafe to have US dollar exposure. It certainly hurts when US stocks go down at the same time the US dollar does.

[ockham]

I don't understand the obsession with currency hedging. What BMO could have offered was something we actually need, inexpensive Canadian domiciled non-currency hedged foreign market ETFs. Too bad.

Put all your money in US dollars and see how comfortable you feel as your networth bounces around. Most of your money will end up being spent in Canada on housing and canadian services. At least in my limited experience, it seems unsafe to have US dollar exposure. It certainly hurts when US stocks go down at the same time the US dollar does.

Didn't mean to suggest putting all one's money in US$ makes sense. But putting some does. It would be really nice to be able to buy the S&P500 through an unhedged Canadian ETF. Not possible, so far as I know.

[Contrarian]

I don't understand the obsession with currency hedging. What BMO could have offered was something we actually need, inexpensive Canadian domiciled non-currency hedged foreign market ETFs. Too bad.

Put all your money in US dollars and see how comfortable you feel as your networth bounces around. Most of your money will end up being spent in Canada on housing and canadian services. At least in my limited experience, it seems unsafe to have US dollar exposure. It certainly hurts when US stocks go down at the same time the US dollar does.

Didn't mean to suggest putting all one's money in US$ makes sense. But putting some does. It would be really nice to be able to buy the S&P500 through an unhedged Canadian ETF. Not possible, so far as I know.

buy some US bonds instead of canadian bonds to get the exposure. its just gambling with currency. you are just adding risk with no reward.

[Pickles]

From an announcement in BMOIL:

TORONTO, Dec. 3 /CNW/ - BMO Financial Group today
announced that all 13
BMO ETFs(x) listed on the TSX will offer an optional Distribution Reinvestment
Plan (DRIP) effective immediately. Under the DRIP, rather than receiving cash
distributions, all distributions paid on BMO ETFs can be reinvested into
additional units of a fund.
DRIPs may be a beneficial option for investors looking to increase their
units of a fund over time in a more cost effective manner by both minimizing
commission costs and taking advantage of the benefits of dollar cost
averaging.

[CROCKD]

An article today on BMO's hedged Nasdaq 100 ETF in the G&M

Tech ETFs: Few choices in Canada, plenty in the U.S.

I owned XIT at one stage but as noted it tracks only a few tech stocks in Canada.

What do others think of this ETF? I suppose if you wanted an unhedged investment, you could buy the QQQQ on the Nasdaq.

[queerasmoi]

I own some ZCS, and yesterday (April 12) was supposed to be the dividend pay date. It's after close now on the 13th and I don't see anything. Credential Drect says they'll investigate. I'm signed up for the DRIP too.

Anyone else here holding BMO ETFs and waiting for their distributions?

[queerasmoi]

It's two days past the pay date today... nada, no sign of it. Hmmm.

[AltaRed]

Often just a back office posting delay. I've seen it off and on over the years. Do you really look at your account more than 1-2 times a month?

[queerasmoi]

Often just a back office posting delay. I've seen it off and on over the years. Do you really look at your account more than 1-2 times a month?

Usually around dividend time I gather up all the spare cash in the accounts, add my regular contribution and use it all to buy some TD e-series units. So I check for all the dividends to come in, then I collect the cash and proceed. This is the very last one I'm waiting for...

Then I don't look at the account for another nearly-3-months.

[queerasmoi]

Update: One full week after dividend pay date... nada...
Edit: Aha! It finally arrived, one share and one wisp of cash.

[Shakespeare]

More BMO ETFs:

The following new BMO ETFs begin trading on the Toronto Stock Exchange today:

-- BMO Equal Weight REITs Index ETF (ZRE)
-- BMO Equal Weight US Banks Hedged to CAD Index ETF (ZUB)
-- BMO Equal Weight US Health Care Hedged to CAD Index ETF (ZUH)
-- BMO Junior Oil Index ETF (ZJO)
-- BMO Junior Gas Index ETF (ZJN)
-- BMO Long Federal Bond Index ETF (ZFL)
-- BMO Real Return Bond Index ETF (ZRR)
-- BMO Emerging Markets Bond Hedged to CAD Index ETF (ZEF)

ZRE and ZRR may be interesting. ZRR has an MER of only 0.25% compared to XRB's 0.35%.

[ThinkDividends]

IMO - The BMO Equal Weight REITs Index ETF (ZRE) should be superior to the iShares version (XRE).

Less RioCan the better.

Same MER.

[Springbok]

ZRE and ZRR may be interesting. ZRR has an MER of only 0.25% compared to XRB's 0.35%.

What do you think might happen to the ZRR unit prices if interest rates increase say 2% over next 5 years? And then, what would net yield be if they were sold at that time?

[Shakespeare]

if interest rates increase say 2% over next 5 years?

Real return bonds are affected by real, not nominal, interest rate expectations and will not necessarily react as normal bonds (and normal interest rates) do.

[Springbok]

if interest rates increase say 2% over next 5 years?

Real return bonds are affected by real, not nominal, interest rate expectations and will not necessarily react as normal bonds (and normal interest rates) do.

I realize that, and that is partly why I asked the question. Because this is investing in a fund and not the RRB itself, my question related to how a 2% increase in BOC rate would affect the fund values and therefore the net yield if the units had to be sold at the time of that increase. In other words, if I invested in ZRR now and in 2015, I needed to sell the fund and rates were 2% higher, what would net yield likely be?

Something causes considerable fluctuation in RRB fund values, as the chart below (for XRB) indicates. In late 2008, these units appear to have dropped in tandem with the equity markets.

[Shakespeare]

Something causes considerable fluctuation in RRB fund values,

I believe James has linked a number of papers on Prefblog that deal with changes in real rates. Nominal rates are only one factor, and not the main one.

My suspicion is that psychological factors (risk aversion) play a major part.

Added: see http://www.prefblog.com/?p=6630 for example on a paper.

The simplest explanation is that deviations of the BEIR [Break Even Inflation Rate] from survey measures of inflation expectations are the result of some phenomenon other than changes in uncertainty regarding inflation.

Note that if risk aversion is a major factor, pricing will fluctuate due to exogenous (and likely unforcastable) events.

[George$]

I have a simple question.

At the BMO Real Return Bond Index ETF (ZRR) webpage it shows a current 1.43% "Weighted Average Yield to Maturity"

Am I correct in taking this to mean 1.43% real (above inflation) yield?

[Shakespeare]

Am I correct in taking this to mean 1.43% real (above inflation) yield?

Yes.

From the BoC:

[Bylo Selhi]

From the BoC:

I assume you haven't found an alternative to http://www.pfin.ca/canadianfixedincome/ ... turns.aspx either. They haven't responded to my e-mail

[Shakespeare]

I assume you haven't found an alternative to

Logging on to my account at RBCDI and checking the current value, then dividing by the index ratio. But it rarely changes enough intramonth to be worth bothering.

[Bylo Selhi]

Logging on to my account at RBCDI ...

I don't suppose you'd be willing to post your login info on the RRB wiki page so others could perform the same calculation?

[ig17]

BMO Investments Inc. Receives Securityholder Approval for Changes to its Mutual Funds Line-Up

The following is a summary of the approved changes.

BMO Equity Index Fund

As of close of business on September 17, 2010, the investment objectives of BMO Equity Index Fund will change to allow the fund to provide a return that is similar to the return of one or more exchange-traded funds that invest primarily in Canadian equities. The fund will invest all or a portion of its assets in one or more exchange-traded funds, invest directly in the underlying securities held by the exchange-traded funds and/or use derivatives to provide the fund with a return determined by reference to the exchange-traded funds. The investment strategies for this fund will also be revised to reflect the new objectives. In addition, the fund’s name will change to “BMO Canadian Equity ETF Fund”.

BMO International Index Fund

ditto

BMO U.S. Equity Index Fund

ditto

In a nutshell: these funds are now allowed to invest close to 100% of their assets in a matching BMO ETF. Fund MERs remain unchanged. 1% Canadian, 1.09% International, 1.1% US.

A nice gig, if you can get it.