BMO Global Asset Management has launched three exchange-traded funds (ETFs) in Hong Kong, becoming the first Canadian bank to offer ETFs to Hong Kong retail investors.
BMO Global Asset Management said the new three structures – the BMO Asia USD Investment Grade Bond ETF, BMP Hong Kong Banks ETF and the BMO Asia High Dividend, will provide exposure to smart beta strategies and fixed income via a range of underlyings including a portfolio of high quality Asia bonds, banking stocks listed on Hong Kong Stock Exchange and more than 150 high dividend shares. They are expected to go live on 13 November.
“In a low interest rate environment, the demand for income and growth may not be met by fixed income investments alone,” said BMO Global Asset Management managing director Amit Prakash. “Dividend-paying stocks offer a competitive yield and growth potential. Investors can capitalise on the rapid development of Asian capital markets and tap the growth story in the region.”
Prakash said BMO has a positive outlook for the region’s economy and capital markets and, more specifically, the financial services sector.
“We have seen a shift from companies using bank loans to financing expansion through capital market activity,” he said. “Our ETFs allow investors to participate in these underlying trends through products which offer long-term capital preservation and appreciation potential.”
“Both Nasdaq and Barclays have significant expertise and knowledge in the areas where our products are focused,” said Prakash. “Barclays’ track record in fixed income is arguably unrivalled, and Nasdaq has developed a strong reputation for custom-designed indices.”
Profiles
BMO Asia USD Investment Grade Bond ETF is the first ETF in Hong Kong that offers Asia USD bond exposure to over 450 Asian bonds across 150 issuers, giving investors an investment vehicle that aims to provide regular income with a potential for long-term capital preservation. It invests in high credit quality sovereign and corporate investment grade bonds denominated in US dollars that tracks the performance of the Barclays Asia USD Investment Grade Bond Index.
BMO Hong Kong Banks ETF is the first ETF in Hong Kong to invest in Hong Kong-listed bank stocks with the potential for an attractive dividend yield, to be paid out twice a year. It tracks the NASDAQ Hong Kong Banks Index through a full replication strategy. This ETF will provide investors access to ten to 20 banks in one single trade, as well as exposure to a key economic sector that is a proxy for the growth of the Greater China economies.
BMO Asia High Dividend ETF tracks the NASDAQ Asia ex Japan Dividend Achievers Index, which consists of more than 150 stocks that offer sustainable, attractive dividends in Asia ex Japan. It is one of the very few high dividend yield ETFs that provides a broad equity exposure and generates regular income with potential for long-term capital appreciation.
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