Sales aid: BMO Global Agriculture ETF – ZEATJan. 25, 2023
Why ZEAT and how to utilize
1. Inflation: A large component of recent inflation readings around the world are driven by increased food prices. Investing in ZEAT provides exposure to companies that are directly involved in the production process; these types of companies can easily pass on costs to consumers which can serve as a good hedge against inflation.
2. Food security: An ongoing risk for the world today is that of food shortages, driven by droughts in many regions, changes in farming practices, climate change, population growth and ongoing conflict in Ukraine. These challenges around the world are increasing the demand for agricultural company’s services and production.
3. Long Term Capital Appreciation: ZEAT provides a concentrated exposure to the largest global companies that produce or are involved with the production of necessities. Broad market strategies have very little exposure to agriculture and food-related companies. With food prices skyrocketing, the broad market is less exposed to companies that benefit from such a trend; ZEAT is well positioned to deliver performance given its allocation.
ZEAT will invest in global agriculture and agriculture related equities. Companies that are involved with the production of fertilizers and chemicals, manufacturers of farming machinery and food production/packaging companies will be included.
|Weighting:||Market Capitalization weighted, 8% individual max allocation|
Stock Selection Process
* EBITA stands for Earnings before interest, taxes and amortization, it is used as reliable indicator of company provability. EBITA margins ultimately show how much operating expenses are eating into a company’s gross profit.
† The Target allocation of the Fund’s Top 10 Holdings and the Target Subsectors Breakdown is for illustrative purposes only and will change due to the Fund’s ongoing portfolio transactions without notice.
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