In this research report created this week for The Globe And Mail, we look at Canadian ETF’s: February’s launches
Middlefield Group is the latest asset manager to join the ETF industry.
Middlefield Group is a specialty investment manager that creates and manages specialized investment products for individual and institutional investors. The new ETF issuer converted two closed-end funds, together representing more than $150-million in assets, into ETFs. The Middlefield Healthcare & Life Sciences ETF (LS) focuses on securities of issuers operating in the health care, life sciences and related industries, while the Middlefield REIT INDEXPLUS ETF (IDR) provides low-cost exposure to the global real estate sector through a combination of indexing and active portfolio management.
Desjardins expanded its suite of responsible investment ETFs with the launch of the Desjardins RI Emerging Markets Multifactor Low CO2 ETF (DRFE) and the Desjardins RI Global Multifactor – Fossil Fuel Reserves Free ETF (DRFG).
DRFE seeks to replicate the performance of the Scientific Beta Desjardins Emerging RI Low Carbon Multifactor Index. The index is composed of securities selected based on a multifactor approach: size, valuation, volatility, momentum, profitability and investment. These securities are also selected to significantly reduce the weighted average carbon intensity and ensure that all constituent issuers meet predetermined environmental, social and governance (ESG) standards. It charges a management fee of 0.65 per cent.
DRFG tracks the Scientific Beta Desjardins Global RI Fossil Fuel Reserves Free Multifactor Index. The index is composed of securities selected based on a multifactor approach. These securities are also selected to significantly reduce the carbon asset stranding-risk exposure and ensure that all constituent issuers meet predetermined ESG standards. The management fee on DRFG is 0.6 per cent of net asset value.
Following the steps of other major ETF providers, Bank of Montreal launched a suite of risk-based asset allocation ETFs. Each ETF charges a management fee of 0.18 per cent and invests in global equity and fixed income ETFs, according to their risk specifications. The BMO Conservative ETF (ZCON) targets a 60-per-cent fixed income and 40-per-cent equity exposure, the BMO Balanced ETF (ZBAL) targets a 40-per-cent fixed income and 60-per-cent equity exposure, and the BMO Growth ETF (ZGRO) targets a 20-per-cent fixed income and 80-per-cent equity exposure.
In addition to the one-ticket solution ETFs, BMO also introduced three U.S. equity ETFs: the BMO Covered Call US Banks ETF (ZWK), the BMO Equal Weight US Health Care Index ETF (ZHU) and the BMO Nasdaq 100 Equity Index ETF (ZNQ). The BMO Ultra Short-Term US Bond ETF (ZUS.U) was also added to BMO’s product lineup. It provides exposure to short-term U.S. fixed income asset classes, with a term to maturity of less than one year or reset dates within one year. The ETF is also offered in accumulating units under the ticker ZUS.V.