Two new ETFs for Canadian investors

Article Excerpt

This month we look at new ETFs that use derivative instruments to target specific investment outcomes. The BMO U.S. Equity Buffer ETF aims to offer upside market gains, combined with limited protection against market declines. The Harvest Industrial Leaders Income ETF aims to supplement the income and yield of a portfolio of U.S. industrial companies through the sale of call options. BMO U.S. EQUITY BUFFER ETF $30.86 (NEO symbol ZAPR) invests in U.S. equities and uses derivative structures to offer some protection in the event of a market downturn. The ETF launched on March 25, 2024, and holds $15.2 million in assets. The MER is 0.73%. The ETF invests in the BMO S&P 500 Index ETF Hedged to CAD (symbol ZUE) combined with put and call options; this combination targets upside participation capped at 10% in the S&P 500 Index and downside protection for the first 15% decline in the S&P 500. Meanwhile, the fund incurs added costs to buy derivatives to take its long and short…