5 for 5: Lowering Volatility with BMO ETFsFeb. 2, 2023
- Theme: Ultra Short Term Fixed Income
- Investment-grade bonds with <1-year maturity, held until maturity
- Low duration of 0.42 to mitigate risk of increasing interest rates
- Low 1-year volatility of 1.2%; yield to maturity of 4.98%
- Theme: Low Volatility Canada
- Overweight defensive sectors and lower beta companies
- Provides improved risk-adjusted return benefits vs index historically1
- 1-year volatility of 11.0%, vs 15.3% for S&P/TSX Composite Index
- Theme: Covered Call Utilities
- Utilities, Energy Pipelines, Telecoms provide overall defensive positioning
- Addition option income stream serves to dampen volatility
- 1-year volatility of 12.2%, vs 15.3% for S&P/TSX Composite Index
- Theme: Low Volatility US
- Underweight Technology (higher beta), and overweight defensive sectors (Staples, Utilities, Real Estate)
- Benefitting in 2022 from the shift away from Growth, and into defensives/Value
- 1-year volatility of 12.6% vs 22.1% for S&P 500 Index
- Theme: Infrastructure
- Invested in infrastructure equities with defensive income streams
- Partially hedged to inflation, and strong underlying demand
- 1-year volatility of 14.8% vs 19.2% for MSCI World Index
Source: Bloomberg February 2, 2023
1 Bloomberg, as of February 2, 2023. ZLB 10-year risk-adjusted performance relative to S&P/TSX Composite.
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