The Bank of Montreal, or BMO for short, is the eighth largest North American bank. BMO offers a number of exchange-traded funds (ETFs). Investors have many investments to choose from when it comes to building a portfolio. In this article, we will compare the 10 best BMO ETF products based on numerous benchmarks. These ETFs track the performance of equity markets, but there are some key differences among them. By the end of this read, you should have a good idea of which BMO ETFs are right for you.
Table of contents
- What is an ETF?
- 10 Best BMO ETFs in Canada
- 1. MSCI USA High-Quality Index ETF (ZUQ)
- 2. MSCI All Country World High-Quality Index ETF (ZGQ)
- 3. Global Infrastructure Index ETF (ZGI)
- 4. Low Volatility Canadian Equity ETF (ZLB)
- 5. MSCI Europe High-Quality Hedged to CAD Index ETF (ZEQ)
- 6. Low Volatility International Equity Hedged to CAD ETF (ZLD)
- 7. S&P 500 Index ETF (ZSP)
- 8. Growth Index Portfolio ETF (ZGRO)
- 9. Balanced Index Portfolio ETF (ZBAL)
- 10. Conservative Index Portfolio ETF (ZCON)
- How much does BMO charge for ETF management fees?
- What is the best BMO dividend ETF?
- Are BMO ETFs good?
An exchange-traded fund, or ETF for short, is a type of investment fund that tracks a certain index or asset. They hold a basket of assets which provides broad exposure to general markets. ETFs are traded on stock exchanges and can be bought and sold like stocks. They are often seen as a good investment because they offer diversification and are usually cheaper than mutual funds. In addition, there are various kinds of ETFs which appeal to all investors, such as high-growth and income-generating products.
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Does BMO have an ETF?
Yes, BMO offers an ETF. In fact, they offer many and are one of the largest ETF providers in Canada! There is an option for nearly every kind of investor based on sector and risk tolerance. In the next section, we will explore some of the best BMO ETFs in Canada.
10 Best BMO ETFs in Canada
BMO Global Asset Management is the 8th largest financial institution in North America in terms of assets. They boast $971 billion in total assets as of November 2021. Their size gives BMO significant buying power. Plus, the ability to offer a wide range of products and services to their clients.
When it comes to the best BMO ETFs, investors can rest assured. They are getting access to some of the best resources available in the industry. With over 150 years of experience, BMO has a proven track record of delivering strong returns for its investors. For these reasons, BMO is an excellent choice for those looking for a reliable and reputable asset manager.
Here’s a look at the 10 best BMO ETFs to choose from.
|MSCI USA Quality Index
|MSCI All Country World High Quality Index
|Dow Jones Brookfield Global Infrastructure North American Listed Index
|MSCI Europe Quality 100% Hedged to CAD Index
|S&P 500 Index
1. MSCI USA High-Quality Index ETF (ZUQ)
This fund provides investors with exposure to the performance of the MSCI USA High-Quality Index, net of expenses. The fund invests primarily in equity securities that are selected to replicate the performance of the underlying index. The fund has a low expense ratio of 0.34%. Plus, it is well diversified, making it a great option for investors seeking exposure to high-quality US stocks.
2. MSCI All Country World High-Quality Index ETF (ZGQ)
ZGQ seeks to track the investment results of the MSCI All Country World High Quality Index. The Index consists of high-quality equities from various global stock markets, as defined by MSCI. The fund manager screens equity securities from these markets for high returns on equity, low financial leverage, and stable year-over-year growth of earnings. As a result, the fund provides investors with a more geographically diversified approach to investing in high-quality equities. Due to the fact that it is an exchange-traded fund, it offers flexibility and convenience. Hence, ZGQ is a great option if one is looking for the best BMO ETF.
3. Global Infrastructure Index ETF (ZGI)
The BMO Global Infrastructure Index ETF (ZGI) is designed to provide investors with returns that track the performance of the Dow Jones Brookfield Global Infrastructure North American Listed Index, net of expenses. The ETF invests in a basket of infrastructure stocks that are listed on exchanges in North America. Further, it is one of the best BMO ETFs for diversified exposure to the infrastructure sector. The fund has a diversified mix of assets including transportation, utilities, and energy. Plus, it offers a high dividend yield of 3.34%. ZGI is a great option for investors looking for exposure to the infrastructure sector through an ETF that tracks a broad index.
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4. Low Volatility Canadian Equity ETF (ZLB)
The BMO Low Volatility Canadian Equity ETF (ZLB) is the best BMO ETF to invest in for those looking for relatively safer returns from the Canadian equity security market. The fund offers exposure to low beta-weighted sections of Canadian stocks, providing investors with the potential to mitigate some of the risks associated with volatile markets. With a focus on quality companies with strong fundamentals, ZLB provides you with the opportunity to generate long-term capital appreciation while limiting downside risk.
5. MSCI Europe High-Quality Hedged to CAD Index ETF (ZEQ)
The BMO MSCI Europe High-Quality Hedged To CAD Index ETF (ZEQ) is a fund that seeks to reproduce the performance of the MSCI Europe Quality 100% Hedged to CAD Index, net of expenses. The fund invests in equity securities of companies located in developed European countries, including Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. The fund is denominated in Canadian dollars and is hedged to the Canadian currency. The fund’s investment objectives are to provide investors with exposure to the quality assurance best BMO ETF fund for closet indexing and an opportunity for capital appreciation. The fund is managed by BlackRock Asset Management Canada Limited, not BMO directly.
6. Low Volatility International Equity Hedged to CAD ETF (ZLD)
BMO Low Volatility International Equity Hedged To CAD ETF (ZLD) is one of the best BMO ETF funds for investors seeking to achieve returns through exposure to a low beta weighted and geographically diversified portfolio of equity securities from developed countries outside of North America. The fund’s objective is to provide long-term capital growth by investing in a portfolio of equity securities of companies located outside of Canada and the United States that, in the opinion of the managers, have the potential for above-average growth. The fund invests primarily in large-cap stocks. However, it may also invest in mid-cap stocks. The fund is managed by a team of experienced investment professionals using a disciplined, risk-averse approach designed to generate consistent long-term returns while mitigating volatility.
7. S&P 500 Index ETF (ZSP)
Another great ETF from BMO is ZSP. It is designed to provide investors with investment returns by replicating the performance of the S&P 500 Index, to the extent possible and net of expenses. The fund invests in a diversified portfolio of large-capitalization U.S. stocks that are tracked by the S&P 500 Index and weighs its holdings by the index. ZSP charges a management expense fee of 0.09% which is quite low.
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8. Growth Index Portfolio ETF (ZGRO)
BMO ZGRO is one of the best-performing BMO ETFs and provides investors with long-term capital gains by investing in a portfolio of fixed-income and equity security ETFs. The fund aims to provide investors with a one-ticket solution to a wide range of securities geared towards growth. It also offers exposure to a broad range of asset classes including domestic and international equities, government and corporate bonds, and real estate. The fund’s diversified approach to asset allocation aims to provide investors with downside protection while still allowing them to participate in the upside potential of the market.
9. Balanced Index Portfolio ETF (ZBAL)
The BMO Balanced Index Portfolio ETF (ZBAL) is an excellent option for investors looking to achieve moderate long-term capital growth. The fund invests in a portfolio of fixed-income and equity security ETFs, providing exposure to a broad range of asset classes and sectors. While the fund does take on a slightly conservative approach, its focus on index ETFs ensures it provides the best BMO ETF portfolio. This well-rounded investment strategy is easily accessible through ZBAL, with a low management fee of 0.20%.
10. Conservative Index Portfolio ETF (ZCON)
The BMO Conservative Index Portfolio ETF (ZCON) is another all-in-one ETF solution offered by BMO Global Asset Management. It is designed to provide investors with income and moderate long-term capital gains by investing in a portfolio of fixed-income and equity security ETFs. The best BMO stock ETF for conservative investors looking for an all-in-one solution, ZCON invests in a mix of fixed income and equity ETFs that offer broad exposure to the Canadian market. ZCON is well suited for investors who are looking for a one-stop solution that provides exposure to a wide range of asset classes and sectors.
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How much does BMO charge for ETF management fees?
The amount of management fees varies on the specific ETF. For instance, an actively managed ETF would have a higher management fee when compared to a passively managed ETF. However, management fees under 1% are quite reasonable, and it’s even better if they’re under 0.5%. Most of the options listed above have a MER below 0.5% which means more of your investment income goes into your pocket!
Investors looking for the best BMO dividend ETF can find it in the Canadian Dividend ETF (ZDV) fund. This fund provides investors with exposure to a diversified portfolio of Canadian dividend-paying stocks. The fund’s objective is to provide a high level of monthly income, while also preserving capital. The ZDV fund has a low expense ratio of just 0.39%, making it one of the most cost-effective dividend ETFs available. Moreover, the fund has an impressive track record, having outperformed its benchmark index by more than 1% per year since its inception in 2008. For these reasons, the ZDV fund is an ideal choice for investors seeking the best BMO dividend ETF.
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There is no one-size-fits-all answer to this question, as the best ETF for investors will depend on their investment goals and risk tolerance. However, BMO ETFs are generally considered to be high-quality products that offer a good mix of value and performance. In addition, BMO’s lineup of ETFs covers a wide range of asset classes and strategies, so there is likely to be a BMO ETF that meets the investors’ needs. Overall, BMO ETFs are worthy of consideration for investors looking to expand their portfolios.
Ready to learn more? Check out Building a Balanced Portfolio: Everything You Need to Know