Cash Alternative ETFs

A place to park cash: not all cash ETFs are created equal

BMO ETFs - building ETFs for Canadian Investors since 2009

With 23% of the ETF Market Share in Canada, BMO ETFs continues to be a trusted and tenured asset manager for Canadians with $97 billion invested by institutions, advisors, and direct investors.1 BMO ETFs is the largest Fixed Income ETF provider in Canada offering a diverse and broad range of fixed income ETFs to Canadians.2

1Morningstar, December 31, 2023, 2National Bank Report, January 3, 2024.

BMO Money Market Fund ETF Series

Ticker: ZMMK

Distribution Yield
5.17% | M
Management free
0.12%.*
Risk. Rating
Low

Annualized performance (NAV) as of April 30, 2024

1Y
5.18%
2Y
4.26%
Since Inception
3.57%

BMO Ultra Short-Term Bond

Ticker: ZST
Yield to Maturity
5.21%
Duration
0.26
Distribution Yield
5.16% | M
Coupon
2.82%
Management free
0.15%*
Risk Rating
Low

Annualized performance (NAV) as of April 30, 2024

1Y
5.45%
2Y
5.28%
3Y
2.78%
5Y
2.32%
10Y
1.93%
Since Inception
1.99%

Source: BMO Global Asset Management, as of April 30, 2024.
Annualized Distribution Yield: This yield is calculated by taking the most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV. The yield calculation does not include reinvested distributions.

Weighted Average Yield to Maturity: The market value weighted average yield to maturity includes the coupon payments and any capital gain or loss that the investor will realize by holding the bonds to maturity.

BMO Money Market Fund ETF Series (Ticker: ZMMK)

Provides exposure to high quality money market instruments issued by governments and corporations in Canada, including treasury bills, bankers acceptances, and commercial paper that have a maturity in less than 365 days and have an average term to maturity of less than 90 days.

BMO Ultra Short-Term Bond ETF (Ticker: ZST)

Primarily hold investment grade bonds that mature in one-year or less. Given the bonds in our Ultra Short-Term Bond ETFs are near maturity, they tend to be highly liquid. Bonds in these ETFs aim to provide attractive yield and diversification, while being conservative.

Benefits

Cash-Plus Vehicle

Earn additional yield above treasury bills (T-bills)

Trust Home

Preservation of Capital

Invests in highly rated securities that provide a high degree of safety

Highly Liquid

Can be bought or sold even in large institutional sizes without market impact given the liquidity of the underlying portfolio

No Lock-up Period

Unlike GICs, ETFs can be sold at any time without penalty

Accumulating Units

BMO ETF offers accumulating units for its ultra short-term bond ETFs. BMO Ultra Short-Term Bond ETF (ZST.L, Accumulating Units) and BMO Ultra Short-Term US Bond ETF (ZUS.V, US Dollar Accumulating Units).

  • Effective solution to mitigate price decline by reinvesting distributions and consolidating the units
  • For investors who do not require cash distributions, no distribution is paid out
  • Distributes a quarterly reinvested and consolidated distribution which will be added back to the net asset value (NAV)

BMO USD Cash Management ETF (Ticker: ZUCM/ZUCM.U)

  • Invests primarily in short term U.S. Treasury Bills which are backed by the US Government. 
  • The ETF may hold other short term fixed income investments of appropriate term, quality, and yield. 
  • This is a 100% investment grade ETF 
  • Aim to seek capital preservation, ensuring high levels of liquidity while generating regular monthly income.

Regulatory updates

After the long-awaited review of High Interest Savings Account (HISA) ETFs, the office of the Superintendent of Financial Institutions (OSFI) ruled to uphold 100% liquidity requirements on HISA ETFs.

What is the impact moving forward?

  • HISA ETF gross yields are estimated to drop by 0.50% (to 5%) after January 31, 2024 (TD Securities Report, November 2023).
  • OSFI set new liquidity guidelines for deposits from HISA ETFs, which mandates that these deposits are carried with a 100% liquidity coverage ratio (LCR) runoff factor by January 31, 2024.
  • Despite a drop in yields, HISA ETFs will remain competitive in pricing and it is not expected to impact liquidity.
  • This ruling does not impact stand alone HISA accounts
  • As of October 18, 2023, HISA ETFs and mutual funds have total assets of $29 billion, with $26.1 billion in CAD HISA funds and $2.9 billion in USD HISA funds1

Get started

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

Cash Alternative ETFs FAQ

What is duration?
What is Tactical asset allocation?
What is Strategic asset allocation?
What is a liquidity ratio?

Disclosures

*A management fee waiver of 18 bps was implemented on September 30, 2023. The estimated MER represents what the MER would be with the reduction in place for the entire year.

Risk is defined as the uncertainty of return and the potential for capital loss in your investments

Distribution yields are calculated by using the most recent regular distribution, or expected distribution, (which may be based on income, dividends, return of capital, and option premiums, as applicable) and excluding additional year end distributions, and special reinvested distributions annualized for frequency, divided by current net asset value (NAV). The yield calculation does not include reinvested distributions. Distributions are not guaranteed, may fluctuate and are subject to change and/or elimination. Distribution rates may change without notice (up or down) depending on market conditions and NAV fluctuations. The payment of distributions should not be confused with the BMO ETF’s performance, rate of return or yield. If distributions paid by a BMO ETF are greater than the performance of the investment fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a BMO ETF, and income and dividends earned by a BMO ETF, are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base goes below zero, you will have to pay capital gains tax on the amount below zero.

Cash distributions, if any, on units of a BMO ETF (other than accumulating units or units subject to a distribution reinvestment plan) are expected to be paid primarily out of dividends or distributions, and other income or gains, received by the BMO ETF less the expenses of the BMO ETF, but may also consist of non-taxable amounts including returns of capital, which may be paid in the manager’s sole discretion. To the extent that the expenses of a BMO ETF exceed the income generated by such BMO ETF in any given month, quarter, or year, as the case may be, it is not expected that a monthly, quarterly, or annual distribution will be paid. Distributions, if any, in respect of the accumulating units of BMO Short Corporate Bond Index ETF, BMO Short Federal Bond Index ETF, BMO Short Provincial Bond Index ETF, BMO Ultra Short-Term Bond ETF and BMO Ultra Short-Term US Bond ETF will be automatically reinvested in additional accumulating units of the applicable BMO ETF. Following each distribution, the number of accumulating units of the applicable BMO ETF will be immediately consolidated so that the number of outstanding accumulating units of the applicable BMO ETF will be the same as the number of outstanding accumulating units before the distribution. Non-resident unitholders may have the number of securities reduced due to withholding tax. Certain BMO ETFs have adopted a distribution reinvestment plan, which provides that a unitholder may elect to automatically reinvest all cash distributions paid on units held by that unitholder in additional units of the applicable BMO ETF in accordance with the terms of the distribution reinvestment plan. For further information, see the distribution policy in the BMO ETFs’ prospectus.

Following each distribution, the number of accumulating units of the applicable BMO ETF will be immediately consolidated so that the number of outstanding accumulating units of the applicable BMO ETF will be the same as the number of outstanding accumulating units before the distribution. Non resident unitholders may have the number of securities reduced due to withholding tax. Certain BMO ETFs have adopted a distribution reinvestment plan, which provides that a unitholder may elect to automatically reinvest all cash distributions paid on units held by that unitholder in additional units of the applicable BMO ETF in accordance with the terms of the distribution reinvestment plan. For further information, see Distribution Policy in the BMO ETFs prospectus.

Commissions, management fees and expenses (if any) all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus before investing. Exchange traded funds are not guaranteed, their values 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 prospectus. BMO ETFs and ETF series 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 Global Asset Management is a brand name that comprises BMO Asset Management Inc. and BMO Investments Inc. Certain of the products and services offered under the brand name, BMO Global Asset Management, are designed specifically for various categories of investors in Canada and may not be available to all investors. Products and services are only offered to investors in Canada in accordance with applicable laws and regulatory requirements. Any information contained herein is not, and should not be construed as, investment, tax or legal advice to any party.

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