Horizons, BMO, AGF get October ETF launches underway

The unstoppable rise of Canada’s exchange-traded funds landscape continues to prompt new opportunities for investors, and this week has already seen several new fund launches.

Three ETF providers – BMO, Horizons ETFs, and AGF Investments - have added new funds to their product ranges with the hope of building on net sales of $23 billion for Canadian ETFs in the first eight months of the year.

BMO

BMO’s new structured outcome funds have launched on the Cboe Canada Exchange (the new name for the NEO Exchange) and will be managed by BMO Asset Management and owned by BMO Investments.

They include:

• BMO Canadian Banks Accelerator ETF (ZEBA) - Aims to provide income and approximately double the price return of an index containing equity securities of Canadian banks up to a cap, with approximately single exposure to downside. The fund’s cap will reset at the end of the Target Outcome Period, approximately every quarter.
• BMO US Equity Accelerator Hedged to CAD ETF (ZUEA) - Seeks to provide income and approximately double the price return of an index measuring the large-cap segment of the US equity market, with single exposure to the downside. The fund’s cap will reset at the end of the Target Outcome Period, approximately every quarter.
• BMO US Equity Buffer Hedged to CAD ETF – October (ZOCT) - Seeks to match the income and appreciation that matches, to the extent possible, the return of an index measuring the large-cap segment of the US equity market to an upside cap, while providing protection against the first 15% (before fees, taxes and expenses) of a decrease in the market price of the reference index. The fund resets after the end of the Target Outcome Period of approximately a year each October.
• BMO Global Dividend Opportunities Fund (BGDV) - Seeks to increase the value of the investment over the long term by investing primarily in equity securities of companies from around the world that pay dividends or that are expected to pay dividends.

The funds can be traded on investors’ usual investment channels including discount brokerage platforms and full-service dealers.

“The new Structured Outcome ETFs include both Buffers and Accelerators, allowing investors to gain exposure to broad equity markets, while differentiating their risk-return profiles,” said Sara Petrcich, managing director and head of Exchange Traded Funds and Structured Solutions, BMO Global Asset Management. “Buffer ETFs provide protection on the downside while Accelerator ETFs can enhance return potential with no additional risk. These innovative solutions combine the familiarity of an ETF with structured solutions that give investors a unique way to tailor their exposure to equity markets and make progress on their financial goals.”

BMO has also launched four new funds on the TSX:

• BMO Long Short Canadian Equity ETF (TSX: ZLSC) - seeks to provide income and long-term capital appreciation, primarily by taking long and short positions in equity securities issued by Canadian companies. BMO Long Short Canadian Equity ETF will also invest excess cash in fixed income instruments or exposures. BMO Long Short Canadian Equity ETF may employ leverage to enhance returns, whereby the sum of long and short equity exposures will generally exceed 100%.
• BMO Long Short US Equity ETF (TSX: ZLSU) seeks to provide income and long-term capital appreciation, primarily by taking long and short positions in equity securities issued by US companies. BMO Long Short US Equity ETF will also invest excess cash in fixed income instruments or exposures. BMO Long Short US Equity ETF may employ leverage to enhance returns, whereby the sum of long and short equity exposures will generally exceed 100%.
• BMO S&P/TSX 60 Index ETF (TSX: ZIU) seeks to replicate, to the extent possible, the performance of a Canadian equity index, net of expenses. Currently, BMO S&P/TSX 60 Index ETF seeks to replicate, to the extent possible, the performance of the S&P/TSX 60 Index.
• BMO USD Cash Management ETF (TSX: ZUCM andTSX: ZUCM.U) - seeks to maximize current income, while at the same time preserving capital and maintaining liquidity, by providing unitholders exposure to high quality short term fixed income securities denominated in US dollars.

And the BMO Global Dividend Opportunities Fund (NEO: BGDV) has closed its initial offering of Active ETF Series units and are listed and trading on the NEO Exchange. It seeks to increase the value of unitholders' investment over the long term by investing primarily in equity securities of companies from around the world that pay dividends or that are expected to pay dividends.

Horizons ETFs

The three new offerings from Horizons ETFs are part of the firm’s Premium Yields Suite and are available in both Canadian and U.S. dollar versions.

"With our upcoming Premium Yield Suite, we'll provide an opportunity for portfolio security in the search for significant yield," said Rohit Mehta, president, and CEO of Horizons ETFs. "With an underlying portfolio of U.S. Treasury securities backed by the credit of the U.S. government coupled with an actively managed options program driven by our expertise in the field, our Premium Yield ETFs will seek to offer peace of mind and meaningful monthly income for investors."

The new funds include:

• Horizons Short-Term U.S. Treasury Premium Yield ETF ("SPAY.U" and "SPAY") - SPAY.U seeks to provide: (a) exposure to the performance of a portfolio of U.S. Treasury securities, generally targeting a duration less than 3 years; and (b) high monthly distributions of interest income and option premiums. To generate premiums and reduce volatility, SPAY.U will employ a dynamic option program.
• Horizons Mid- Term U.S. Treasury Premium Yield ETF ("MPAY.U" and "MPAY") - MPAY.U seeks to provide: (a) exposure to the performance of a portfolio of U.S. Treasury securities, generally targeting a duration between 5 and 10 years; and (b) high monthly distributions of interest income and option premiums. To generate premiums and reduce volatility, MPAY.U will employ a dynamic option program.
• Horizons Long-Term U.S. Treasury Premium Yield ETF("LPAY.U" and "LPAY") - LPAY.U seeks to provide: (a) exposure to the performance of a portfolio of U.S. Treasury securities, generally targeting a duration over 10 years; and (b) high monthly distributions of interest income and option premiums. To generate premiums and reduce volatility, LPAY.U will employ a dynamic option program.

The ETFs are expected to close their initial offering of units to their designated broker on October 4, 2023, and are expected to begin trading on the TSX when the market opens on October 5, 2023.

AGF Investments

There’s one new fund from AGF Investments, the AGF Emerging Markets ex China Fund, which is designed to capture the potential of emerging markets and provide international diversification.

It’s now trading on Cboe Canada under the symbol AEMX and has launched as a mutual fund with an ETF option.

“Our new Fund provides investors with the opportunity to look beyond China to diversify their core equity holdings and to benefit from the strong performance and potential of other developing countries,” said Karrie Van Belle, Chief marketing and innovation Officer, AGF Investments.