ETF investors have noticed the enormous growth in ETFs offered over the past two years. We’ve gone from simple “emerging markets” ETFs like Vanguard’s VWO and iShares’ EEM/XEM to not only BRIC ETF offerings (such as Claymore’s CBQ), but now iShares Canada is offering ETFs specific to India (TSX: XID), Brazil (TSX: XBZ) and Latin America (TSX: XLA) more generally.
To this already large list we can now add 22 ETFs from the Bank of Montreal (BMO). Most of these were launched in October of 2009, but some were just added in January 2010.
Do we really need more ETFs, you might ask? The broad market and the key niches are certainly all already covered. But the BMO ETFs seek to further diversify and specify some of these selections. For example, there’s a short-term Federal Bond Index ETF (TSX: ZFS) as well as one that focuses exclusively on Provincial Bonds (TSX: ZPS). BMO is arguably leading in fixed income ETF offerings for Canadians.
Other unique BMO ETFs include a junior gold miners ETF (TSX: ZJG) and a pure utilities ETF play (TSX: ZUT).
On the international equity side, BMO has recently launched the following new ETFs:
- Global Infrastructure ETF (TSX: ZGI)
- China Equity Hedged to CAD ETF (TSX: ZCH)
- India Equity Hedged to CAD ETF (TSX: ZID) (compare with Wisdom Tree India ETF)
Best Canadian ETFs and Stocks From Last Decade (1999-2009)
Lowest Canadian ETF MERs
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One of the great things about the BMO ETFs that will help them stick out from their competitors in the broad market space are the amazingly cheap MERs on one of them. The BMO Dow Jones Canada Titans 60 ETF (TSX: ZCN) has an MER of only 0.15%, making it the cheapest Canadian ETF, and comparable, but cheaper, than the iShares XIU.
Even the most expensive Canadian ETF MERs are still only 1.15%, with the medium-priced ones sitting around 0.6%.
The new BMO ETFs bring more competition into the Canadian ETF space, which should be good news for keeping MERs down, and will probably add to the migration away from mutual funds. Market saturation is still only at about 10% for ETFs vs. mutual funds in Canada, though, so there’s still a long way to go.
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{ 2 comments… read them below or add one }
Maybe lower fee, but will BMO become as good as iShare when it come to ETF? I don’t think so. You menton iShare, but what about Claymore? iShare and Claymore run the ETF business in Canada. BMO has a long way to go. And if you want my honest opinion, BMO do not have the leadership wanted to become on top when it come ETF.
(PS. Thank you for letting me posting almost everything on your blog. Sorry that you had lost your wallet and your IDs. I once lost or get stolen my metro pass and my credit card (2 times)… I know how it is.) Chow
Claymore’s got great selection, but they are slightly more expensive on average than iShares. I own a bit of COW, but some of Claymore’s ETFs are a bit too narrow for me right now.