BMO Financial Group

BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

December 05, 2011 09:00 ET

What's in a Name? BMO Finds That the More Investors Know About ETFs, the More They Want Them

- While fewer than 20 per cent of Canadian investors are familiar with ETFs, three-quarters - after being told of their benefits - would consider adding them to their portfolios

- Lack of knowledge and not knowing where to begin cited as barriers to increased ETF adoption

- Two-thirds would invest in ETFs if they were structured in the form of a mutual fund

- BMO II's six ETF Portfolios provide access to the benefits of ETFs in the convenience of a mutual fund

TORONTO, ONTARIO--(Marketwire - Dec. 5, 2011) - BMO Investments Inc. (BMO II) today announced the results of a study which examined the level of awareness among Canadian investors around Exchange Traded Funds (ETFs), which are securities that can track indexes but are traded like stocks. The study revealed that, while only 18 per cent of respondents are familiar with ETFs, three-quarters (74 per cent) - after being told of the benefits ETFs have to offer - said they would consider adding them to their investment portfolios.

"Although ETFs have been around for only 20 years, they're gaining in popularity and we believe they are poised to take off in Canada," said Serge Pépin, Head of Investments, BMO Investments Inc. "Investors value the various benefits that ETFs have to offer, including lower costs, transparency, tax efficiencies, investment flexibility and diversity."

The study, by Leger Marketing, also revealed the key barriers preventing Canadians from holding ETFs in their portfolios. These include:

  • Not knowing how to get started / lack of knowledge (34 per cent)
  • Uncertainty on how to integrate ETFs into current investments (23 per cent)
  • Not having the time or expertise to pick and choose individual ETFs (21 per cent)

"Being a relatively new investment option, it's only natural that many investors remain unsure how to effectively integrate ETFs into their investment portfolios," continued Mr. Pépin. "Many are attracted to ETFs, but a lack of knowledge may make them hesitate when adding them to their investments. This is one of the reasons why we introduced our BMO ETF Portfolios, which enable investors to enter the ETF market through the ease and simplicity of a mutual fund."

Among those surveyed, almost two-thirds (65 per cent) indicated that, if they could get all the advantages of ETFs in the convenience of a mutual fund that is managed by a financial professional, they would be more likely to add them to their portfolio.

BMO II's ETF Portfolios give investors access to the benefits of ETFs through easy-to-use mutual fund classes. BMO II's offers four BMO ETF portfolios and two tactical class BMO ETF portfolios. These include:

BMO ETF Risk-Differentiated Portfolios:

  • BMO Security ETF Portfolio Class - Designed for investors seeking low risk investments focused on preservation of capital with the potential to generate returns.
  • BMO Balanced ETF Portfolio Class - Designed for those who are looking for the right combination of safety and growth.
  • BMO Growth ETF Portfolio Class - Designed for investors seeking potentially higher long-term growth who are comfortable with low to medium investment risk.
  • BMO Aggressive Growth ETF Portfolio Class - Designed for those focused on long term growth with medium investment risk who have a very long investment horizon.

BMO Tactical ETF Classes:

  • BMO Canadian Tactical ETF Class - Designed for investors who want a fund that can adjust its investment mix to capitalize on market opportunities and who are comfortable with medium investment risk.
  • BMO Global Tactical ETF Class - Designed for those who want a mix of global equity and fixed income investments in a single fund, and who are comfortable with medium investment risk.

The online survey was commissioned by BMO Asset Management Inc. that manages and administers exchange traded funds. It was conducted by Leger Marketing from November 21 to November 24, 2011, with a sample of 1520 Canadians, 18 years of age or older.

BMO ETF Portfolios are offered by BMO Investments Inc., a financial services firm and separate legal entity from the Bank of Montreal.

Commissions, trading commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

®Registered trade-mark of the Bank of Montreal, used under license.

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