BMO Global Asset Management has partnered with Cathie Wood’s ARK Investment Management LLC to release mutual fund and ETF versions of the Florida-based firm’s innovation ETFs.
The BMO ARK Innovation Fund (ARKK), which began trading today on the Toronto Stock Exchange, is a Canadian version of the US$7.6-billion ARK Innovation ETF.
The U.S. product became widely known when growth stocks took off early in the pandemic, posting a 153% return in 2020. It has since given up those gains amid high inflation and rising rates, with the ETF down by almost 60% for the year to Oct. 31.
That makes it a good time to buy, according to Wood, Ark’s CEO and chief investment officer, and Kevin Gopaul, president and chief commercial officer, BMO ETFs.
“I have never seen innovation on sale like it is today,” Wood said. “The growth rate associated with these strategies are astounding because artificial intelligence is changing the game.”
In addition to ARKK, BMO released the BMO ARK Genomic Revolution Fund (ARKG) and the BMO ARK Next Generation Internet Fund (ARKW). Wood said roughly 70% of ARKK falls into next-gen internet, autonomous tech and robotics, with about 30% genomics names.
All three funds are actively managed and concentrated, with exposure to roughly 35 to 60 names each, Wood said, though they’re currently at the lower end after paring down in this risk-off environment. BMO’s suite of passive innovation ETFs launched last year, on the other hand, offer exposure to hundreds of names.
Emerge Canada Inc. has offered versions of ARK innovation ETFs in Canada since 2019. Wood said those funds are similar, with the BMO versions more closely resembling the U.S. versions.
All three BMO ARK ETFs began trading Thursday on the TSX, and each have management fees of 0.75%.
Gopaul said it’s only the second time BMO has co-branded funds after releasing products earlier this year with Brookfield Asset Management.
Other newly released funds of note:
- BMO also launched three multi-asset funds on Nov. 7. The BMO Global Innovators Fund invests mainly in stocks of companies developing innovative products and services, as well as companies that could benefit from those innovations. Management fees are 1.75% for series A and 0.75% for series F. The risk rating is medium.
- The BMO Global Income & Growth Fund, which aims to provide long-term capital growth and income, invests in fixed income and equities. Management fees are 1.6% for series A and 0.6% for series F. The risk rating is low to medium.
- The BMO Canadian Income & Growth Fund invests in both equity and fixed income. Management fees are 1.45% for series A and 0.45% for series F. The risk rating is low to medium. All three funds “bring the best ideas” from the BMO global equity team, BMO GAM chief investment officer Sadiq Adatia said in a release.
- Invesco Canada Ltd. released its first alternative mutual fund for retail investors, the Invesco Balanced-Risk Allocation Pool. It can buy fixed income and equities, use leverage and put more than 10% of its assets in commodities. The management fee is 1.0% for series F and the risk rating is medium.
- Invesco also released a fund for investors looking for income and capital growth. The Invesco Global Equity Income Advantage Fund, launched on Nov. 17, uses equity-linked notes to generate income and provide downside protection. Management fees are 1.85% for series A and 0.7% for series F. The risk rating is medium.
- Scotia Global Asset Management released a passive ETF for investors seeking large and mid-cap equities in emerging markets. Scotia Emerging Markets Equity Index Tracker ETF (NEO: SITE), which currently tracks the Solactive GBS Emerging Markets Large & Mid Cap Index, launched on Nov. 16. The management fee is 0.16% and the risk rating is medium. SITE is the ninth Scotia ETF listed on the NEO Exchange.
- Toronto-based Purpose Investments Inc. filed a preliminary prospectus for the Purpose Yield Shares ETFs, 10 yield-focused single-stock ETFs that would be the first of their kind in Canada.
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