Accelerator ETFs | BMO Global Asset Management

Q: What are Accelerator ETFs?

Accelerator ETFs seek to take advantage of a slightly upwards trading market by offering approximately 2x the price return of major equity markets in the United States to a cap. The ETFs will provide single one‐for‐one exposure on the downside, resetting quarterly.

Q: What is the MER for Accelerator ETFs?

The MER on all BMO Structured Outcome ETFs is 0.73%.

Need more near-term growth?

BMO Accelerator ETFs offers a way to ramp up your equity exposure and deliver more from a slow growth environment, providing approximately 2x the price returns (plus dividends) of an underlying reference asset.¹

Understanding Accelerator ETFs

BMO US Equity Accelerator Hedged to CAD ETF (Ticker: ZUEA)

BMO Canadian Banks Accelerator ETF (Ticker: ZEBA)

You can effectively double your upside to a pre-Structured level—capitalizing on a mix of equities and options. The kicker: Accelerator ETFs do not amplify your downside risk.

How Accelerator ETFs work

Accelerator ETFs use options contracts engineered to provide approximately 2x price returns with a cap on the market participation over the defined period. The accelerator zone and upside cap on market participation are set at the beginning of the period and only apply at the end of the specified outcome period. Investors trading the ETFs during the period can experience different performance from the stated outcomes.

Why buy these ETFs?

No options expertise required: Traditional ETF that trades on the exchange
No upfront commissions: As opposed to other structures, ETFs are ideal for fee-based and discretionary accounts
No use of leverage: Outcomes generated through mix of equities and option contracts

BMO Accelerator ETFs one-pager

Introducing a new range of BMO ETFs.

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You can purchase BMO Structured Outcome ETFs through your direct investing account with your online broker, or through your investment advisor.

Note: When entering U.S. Dollar unit symbol “(.U)” on Thomson One use “(‘U)”. (‘U-T) for TSX listed ETFs and (‘U-GD) for NEO listed ETFs

Accelerator ETF FAQs

What are Accelerator ETFs?

What is the MER for Accelerator ETFs²?

How are Accelerator ETFs constructed?

Accelerator ETFs are constructed using a three-step process. First, the fund invests in the underlying reference asset. For example, the BMO S&P 500 Hedged to CAD Index ETF, ticker ZUE.

Next, the fund buys an at the money call option to create that enhanced upside potential and at the money call option is when the strike price is equal to the underlying price.

Third, the fund sells two higher strike call options to pay for the cost of the at the money call option. This is what creates the upside cap on the growth potential. The result is a strategy that enhances equity market growth potential while not adding any additional downside risk over the life of the option contracts.

¹BMO Accelerator ETFs seek to provide unitholders with income and approximately double (2x) the price return of a Reference Index that gives exposure to equity securities up to a cap (before fees, expenses and taxes).↩

²As the fund is less than one year old, the actual Management Expense Ratio (MER) will not be known until the fund financial statements for the current fiscal year are published. The estimated MER is an estimate only of expected fund costs until the completion of a full fiscal year and is not guaranteed.↩

Disclosures

This communication is intended for informational purposes only and is not, and should not be construed as, investment and/or tax advice to any individual. Particular investments and/or trading strategies should be evaluated relative to each individual’s circumstances. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment.

An investor that purchases Units of a Structured Outcome ETF other than at starting NAV on the first day of a Target Outcome Period and/or sells Units of a Structured Outcome ETF prior to the end of a Target Outcome Period may experience results that are very different from the target outcomes sought by the Structured Outcome ETF for that Target Outcome Period. Both the cap and, where applicable, the buffer are fixed levels that are calculated in relation to the market price of the applicable Reference ETF and a Structured Outcome ETF’s NAV (as Structured herein) at the start of each Target Outcome Period. As the market price of the applicable Reference ETF and the Structured Outcome ETF’s NAV will change over the Target Outcome Period, an investor acquiring Units of a Structured Outcome ETF after the start of a Target Outcome Period will likely have a different return potential than an investor who purchased Units of a Structured Outcome ETF at the start of the Target Outcome Period. This is because while the cap and, as applicable, the buffer for the Target Outcome Period are fixed levels that remain constant throughout the Target Outcome Period, an investor purchasing Units of a Structured Outcome ETF at market value during the Target Outcome Period likely purchase Units of a Structured Outcome ETF at a market price that is different from the Structured Outcome ETF’s NAV at the start of the Target Outcome Period (i.e., the NAV that the cap and, as applicable, the buffer reference). In addition, the market price of the applicable Reference ETF is likely to be different from the price of that Reference ETF at the start of the Target Outcome Period. To achieve the intended target outcomes sought by a Structured Outcome ETF for a Target Outcome Period, an investor must hold Units of the Structured Outcome ETF for that entire Target Outcome Period.

S&P 500® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”). This trademark has been licensed for use by S&P Dow Jones Indices LLC and sublicensed to BMO Asset Management Inc. in connection with the above-mentioned BMO ETFs. These BMO ETFs are not sponsored, endorsed, sold or promoted by S&P Dow Jones LLC, S&P, or their respective affiliates and S&P Dow Jones Indices LLC, S&P and their affiliates make no representation regarding the advisability of trading or investing in such BMO ETF(s).

Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. The indicated rates of return are the historical annual compound total returns including changes in prices and reinvestment of all distributions and do not take into account commission charges or income taxes payable by any unitholder that would have reduced returns. Exchange traded funds are not guaranteed, their value change frequently and past performance may not be repeated.

For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETFs prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/ or elimination.

BMO ETFs are managed and administered by BMO Asset Management Inc., an investment fund manager and portfolio manager, and separate legal entity from Bank of Montreal.

BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate.

®/™Registered trademarks/ trademark of Bank of Montreal, used under licence.

BMO Accelerator ETFs