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Precision investment engineering with BMO Enhanced Income Equity ETFs
Our Enhanced Income Equity ETFs offer equity exposure to three major market indices, utilising covered call options to provide an enhanced, sustainable yield and a smoother return profile than their respective index.
• BMO Enhanced Income UK Equity UCITS ETF
• BMO Enhanced Income Euro Equity UCITS ETF
• BMO Enhanced Income USA Equity UCITS ETF
BMO ETFs are carefully constructed to target desired levels of income and risk, helping you achieve diversification and stability of income in your portfolio with precise investment engineering. Our enhanced income strategy looks to achieve index like returns over the long term, with reduced volatility and higher yield. We target a yield enhancement of 2 – 4% over the chosen equity benchmark across our suite.
In the UK the three new ETFs increase our product range in EMEA from 10 to 13 funds. As a global asset manager we continue to seek opportunities to leverage on our successes across all markets.
Our ETF investment specialists
We launched our first ETF in Toronto in 2009 and we have over 100 ETF listings globally, with £23.5bn assets under management across our Systematic and ETF strategies (as at 31 May 2017). We became the first Canadian bank to offer ETFs in Europe with the launch of our European range in November 2015. With the addition of the new Enhanced Income ETFs, the range now comprises 13 ETFs listed on the London Stock Exchange.
Terry Wood, CFA
Head of ETF Portfolio Management (EMEA)
Terry Wood, CFA
Terry joined the Group in August 2007. Prior to this, Terry worked at Insight Investment as a Quantitative Analyst. Previously Terry spent nine years at Deutsche Asset Management as a Quantitative Analyst for the Global Equity team. He holds a BA (Hons) in Accounting & Finance from the University of Kent and is a CFA charterholder.
A member of the ETF team since 2015, having joined the Group two years earlier as a researcher within the Multi-Asset Alternatives team. Alex moved from Goodhart Partners where he was one of the founding partners and an analyst on their range of multi-manager portfolios, having been involved in the development and launch of these portfolios whilst at WestLB Asset Management. Alex joined WestLB from Aon Consulting in 2006, where he spent seven years as a member of Aon’s Investment Consulting practice. Alex has a BSC (Hons) in Mathematics from Sussex University.
Chris Mchaney, CFA
Vice President, Portfolio Manager Global Structured Investments
Chris Mchaney, CFA
Chris has more than 16 years of experience in the investment industry and currently serves as portfolio manager for equity-based and derivative-based mandates. This includes Canadian, US, international and emerging market equities, and North American derivatives. He co-manages various cross-asset portfolios, which include Canadian, US and global fixed income and commodities based investments. In addition, Chris trades foreign exchange contracts and equity options for mandates across the firm. In his previous role, he was responsible for mutual fund manager monitoring and selection, as well as overseeing the currency hedging program across the mutual fund platform. Chris holds an Honours Business Administration degree from York University's Schulich School of Business and is a CFA charterholder.
Our investment objective
Watch our video to learn more
Investors are looking for alternative ways to generate sustainable income without taking on additional risk. Enhanced Income Strategies, also known as covered call strategies, are efficient solutions that can add income to a portfolio without increasing the equity risk.
ETFs are an efficient way to access an enhanced income strategy combining passive equity portfolio management and a rules-based options overlay methodology, at a low cost.
BMO Enhanced Income Equity ETFs provide equity exposure with a sustainable attractive yield and lower volatility than a traditional market capitalisation weighted index.
Our distinctive strategy
Register for our live webinar
Henry Cobbe, Head of Research at Elston Consulting, and Morgane Delledonne, ETF Investment Strategist at BMO Global Asset Management, assess and debate the characteristics of ETFs available to UK investors seeking higher than average income levels. Morgane also introduces the BMO Enhanced Income Equity ETFs.
The Enhanced Income strategy is implemented by selling call options on the index, while owning the underlying stocks. This allows the portfolio to generate income from the written call option premiums in addition to the dividend yield from the underlying stocks. Option-based strategies take advantage of the supply-demand imbalance that exists between investors looking to hedge their equity positions and the lower number of hedge providers. This allows the fund to harvest the volatility risk premium and generate income for investors while managing the downside risk.
Historically, covered call strategies have provided a similar long-term performance to the broad market with lower risk.
For further information on our BMO Enhanced Income Equity ETFs.
Download our sales aid here .