BMO introduces US Equity Buffer Hedged to CAD ETF, offering income, appreciation, and downside buffer
BMO Asset Management Inc. (BMOAM Inc.), the manager of BMO ETFs, has announced the launch of BMO US Equity Buffer Hedged to CAD ETF – July.
The new ETF, listed under the ticker Cboe CA: ZJUL, has closed its initial offering of exchange-traded units and is now trading on Cboe Canada Inc.
BMO US Equity Buffer Hedged to CAD ETF – July
The ETF aims to provide unitholders with income and appreciation, matching the return of the S&P 500 Hedged to Canadian Dollars Index, up to a cap, before fees, expenses, and taxes.
It also offers a buffer against the first 15 percent of any decrease in the Reference Index over approximately one year, referred to as the Target Outcome Period.
To achieve its objectives, the ETF primarily invests in the BMO S&P 500 Hedged to CAD Index ETF (the Reference ETF). It may also use Converge Options referencing the price return of the Reference ETF to implement a “target outcome strategy.”
This strategy seeks to deliver predetermined investment outcomes based on the performance of the Reference ETF during the Target Outcome Period.
The Reference ETF aims to replicate the performance of the S&P 500 Hedged to Canadian Dollars Index by investing in assets such as ETFs, mutual funds, ADRs, or derivative instruments. It primarily invests in BMO S&P 500 Index ETF and uses derivatives to hedge back to the Canadian dollar.
Additionally, it may hold the constituent securities of the S&P 500 Hedged to Canadian Dollars Index or use a sampling methodology for investment selection.
