BMO Global to offer HK exchange-traded funds
BMO Global Asset Management, one of the fastest growing Exchange Traded Funds (ETF) providers globally, has introduced three ETFs in Hong Kong, making it the first Canadian bank to launch ETFs in Hong Kong.
The ETFs are to be handled by BMO Global Asset Management, a part of BMO Financial Group.
The three ETFs, including BMO Asia USD Investment Grade Bond ETF, BMO Hong Kong Banks ETF and BMO Asia High Dividend ETF, listed on the main board of the Stock Exchange of Hong Kong Limited (SEHK) on Nov 13.
BMO Hong Kong Banks ETF and BMO Asia High Dividend ETF are the first ETFs that track NASDAQ indices in Hong Kong, while the BMO Asia USD Investment Grade Bond ETF is also the first ETFs in Hong Kong that tracks the Barclay Asia USD Investment Grade Bond Index.
The global investment manager with 24 offices located in 14 countries said it was confident in developing innovative and responsible ETFs to Hong Kong investors, together with NASDAQ and Barclays.
The leading provider of ETFs, which first introduced them in Canada in 2009, mainly focuses on delivering high-income levels based on sustainable underlying portfolio yields.
According to Managing Director Amit Prakash with the firm’s Hong Kong ETF team, the demand for income and growth may not be met by fixed income investment alone in the low interest rate environment, and the dividend-paying stocks offer a competitive yield and growth potential.
“Investors can capitalize on the rapid development of Asian capital markets and tap the growth story in the region,” he said. “As one of the top ten largest fixed income ETF providers in the world, we understand the need for income.”
Both the bond and equity ETFs launched will pay regular dividends, allowing investors to earn income while benefiting from Asia’s continued growth, he said.
Prakash said the company holds 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 and our ETFs allow investors to participate in these underlying trends through products which offer long-term capital preservation and appreciation potential,” he said.
The recent agreement to establish a Canadian Renminbi hub has also been applauded by many Canadian companies, describing the joint efforts of the Canadian and Chinese government as fantastic news for companies from both countries.
“The trading hub will ensure that Canadian firms doing business in China can purchase RMB on the open market without converting to another currency first,” said C.J. Gavsie, global head of FX Products & China Capital Markets, BMO Capital Markets, who joined Canada Prime Minister Stephen Harper and Ed Fast, Canada’s minister of trade and minister for the Asia-Pacific Gateway, at the announcement in Beijing.
“As we’ve seen in other jurisdictions, the cost savings will lead to more trade,” said Gavsie. “This, in turn, will create more jobs for Canadians.”
If patterns seen in other global RMB hubs are replicated in Canada, total trade could double or even triple between Canada and China in the 12 months following the establishment of a hub, he said.
The hub will also enhance Canada’s brand around the world, he said.
Canada’s banking system has already been rated the soundest in the world for the past seven years by the World Economic Forum, he said.