Strategy
Product Insights
Product Insights

BMO’s Top 5 Snowbird ETFs

Attention snowbirds looking to diversify their portfolios outside of Canada

Nov. 4, 2022

Investors need to understand the potential withholding tax and U.S. estate tax implications on foreign investments. Wealthy Canadians looking for a place to invest their greenbacks but who are also concerned about U.S. estate taxes, might be better suited to invest in a Canadian listed ETF or mutual fund.

Canadian mutual funds and Canadian listed ETFs (even if they invest in U.S. equity or debt securities), are generally not considered to be U.S. assets for estate tax purposes.*

BMO ETFs presents our top picks for snowbirds. The following ETFs offer:

  • No U.S. Estate Tax Exposure
  • No T-1135 Foreign Income Verification form required
7.40%**
ZPAY.U BMO Premium Yield ETF (USD Units)
  • Alternative defensive yield with downside protection and ability to participate in equity market growth
  • ZPAY has maintained a consistently high portfolio yield of around 6% since it was launched
  • Dynamically shifts equity weight to react to market movements while writing put and call options on blue chip, large cap, U.S. equities
  • Objective: Income
7.05%**
ZWB.U BMO Covered Call Canadian Banks ETF (USD Units)
  • Defensive exposure to Canadian banks, with a covered call overlay
  • Additional tax efficient layer of income from covered calls
  • Invest in the strength of Canadian banks, and benefit from consistent and growing dividends
  • Objective: Income & Growth
6.35%**
ZWH.U BMO US High Dividend Covered Call ETF (USD Units)
  • Defensive exposure to U.S. high-dividend-paying equities, with a covered call overlay
  • Additional tax-efficient layer of income from covered calls
  • Invests in sustainable dividend paying companies, while avoiding yield traps by screening for historical growth rate, momentum and sustainability of the dividends
  • Objective: Income & Growth
4.10%**
ZUS.U BMO Ultra Short-Term US Bond ETF (USD Units)
  • Investment-grade bonds with <1-year maturity, held until maturity
  • Low duration of 0.46 to mitigate risk of increasing interest rates
  • Keep capital protected against inflation, while minimizing market and price volatility
  • No lockup period and trades daily unlike traditional GICs
  • Objective: Income
1.55%**
ZSP.U BMO S&P 500 Index ETF (USD Units)
  • Access a diversified basket of the largest 500 companies in the U.S., with globally derived revenues
  • Growth sectors like Information Technology (28%) and Health Care (14%) are the leading weights
  • Tracks the securities of the largest and most liquid public companies in the United States
  • Objective: Growth

Contact your BMO Exchange Traded Funds specialist for more information.

Note: when entering U.S Dollar unit symbol “(.U)” on Thompson One use “(‘U)”. More specifically, “(‘U-T) “ for TMX data and “(‘U-GD)” for NEO data.

* As long as the Canadian funds are treated as corporations for U.S. tax purposes.

** Annualized Distribution Yield as of November 4, 2022: The most recent regular distribution, or expected distribution, (excluding additional year end distributions) annualized for frequency, divided by current NAV. Source: BMO Global Asset Management.

FOR FINANCIAL ADVISOR USE ONLY. 

This communication is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance The payment of distributions is not guaranteed and may fluctuate.

The payment of distributions is not guaranteed and may fluctuate. The payment of distributions should not be confused with an Exchange Traded Fund’s performance, rate of return or yield. If distributions paid by the Exchange Traded Fund are greater than the performance of the Exchange Traded Fund, your original investment will shrink. Distributions paid as a result of capital gains realized by an Exchange Traded Fund, and income and dividends earned by an Exchange Traded Fund 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. Please refer to the Exchange Traded Funds, distribution policy in the prospectus.

S&P®, S&P/TSX Capped Composite®, S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and TSX” is a trademark of TSX Inc. These trademarks have been licensed for use by S&P Dow Jones Indices LLC and sublicensed to BMO Asset Management Inc. in connection with the above mentioned BMO ETFs. These BMO ETFs are not sponsored, endorsed, sold or promoted by S&P Dow Jones LLC, S&P, TSX, or their respective affiliates and 

S&P Dow Jones Indices LLC, S&P, TSX and their affiliates make no representation regarding the advisability of trading or investing in such BMO ETF(s).

Commissions, management fees and expenses (if applicable) all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. 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 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 ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.

®/™Registered trademarks/trade-mark of Bank of Montreal, used under licence