BMO launches ETFs to target enhanced income

WalletBMO Global Asset Management has launched a set of ETFs it says will help yield-hungry investors gain an enhanced income.

The ETFs use options to gain equity exposure with a sustainable, high yield derived from dividends, the firm said.

The products include three ETFs, each covering the UK, Europe and US markets, and all aim to achieve index-like returns over the long term, offering reduced volatility and higher yield.

Income is distributed quarterly and the ETFs target a yield enhancement of 3% over benchmark, an expected total gross yield of around 5% for the BMO Enhanced Income USA Ucits ETF and approximately 7% for the BMO Enhanced Income UK Ucits ETF and BMO Enhanced Income European Ucits ETF.

Rob Thorpe, head of UK intermediary at the firm, said that the search for yield by investors was “as strong as ever” and they would find the ETFs “useful” for this while ensuring downside protection and minimising volatility risk. 

“With this new suite of ETFs we are able to directly address many concerns that professional investors have, which is how they can precisely manage their portfolios to a desired level of income, while still maintaining the potential for capital gains,” he said.

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