U.S. Inflation Up. When Are Rates Coming Down?
As prices prove to be more stubborn than expected, portfolio managers Charles-Lucien Myssie, Alfred Lee, and your host, Mckenzie Box, digest the latest U.S. CPI print and the broader inflation picture. They also discuss positioning equities ahead of potential rate cuts, U.S. banks, and covered call strategies.
McKenzie Box is Director of Product and Strategy at BMO Global Asset Management. She is joined on the podcast by Charles-Lucien Myssie and Alfred Lee, Portfolio Managers and ETF Specialists at BMO Global Asset Management. The episode was recorded live on Wednesday, February 14, 2024.
ZUT, total returns as at 2024/01/31: 1yr: -9.70%, 3yr: -14.39%, 5yr: 42.45% Since Inception (SI): 142.72%
ZRE, total returns as at 2024/01/31: 1yr: -8.44%, 3yr: 11.09%, 5yr: 19.40% SI: 178.50%
ZWG, total returns as at 2024/01/31: 1yr: 10.18%, 3yr: 27.03%, SI: 28.88%
ZWT, total returns as at 2023/10/31: 1m: 1.92%, 3m: -1.23%, 6m: 18.07%, YTD: 47.60%, 1yr: 45.60%, SI 8.62%
ZWT, total returns as at 2024/01/31: 1yr: 58.84%, 3yr: 53.87%, SI: 50.51%
XNDXCAD INDEX, total returns as at 2023/10/31: 1m: 0.59%, 3m: -3.34%, 6m: 11.81%, YTD: 35.87%, 1yr: 29.71%, SI 6.60%
Since 2010, 90% of the time the market is down over a one-year period, it has been down less than 15%. Source: Bloomberg as of June 30, 2023
Put spread: When an investor buys a put option on a strike and simultaneously sells another put option with a lower strike of the same expiry.
Out-of-the-money (OTM): When the underlying asset’s market price is lower than the strike price for a call option.
Correlation: A statistical measure of how two securities move in relation to one another. Positive correlation indicates similar movements, up or down together, while negative correlation indicates opposite movements (when one rises, the other falls).
BMO Buffer ETFs seeks to provide income and appreciation that match the return of a Reference Index up to a cap (before fees, expenses and taxes), while providing a buffer against the first 15% (before fees, expenses and taxes) of a decrease in the Reference Index over a period of approximately one year, starting from the first business day of the stated outcome period.
Disclosure:
The viewpoints expressed by the Portfolio Manager represent their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. 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. Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance.
Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.
The BMO ETFs or securities referred to herein are not sponsored, endorsed or promoted by MSCI Inc. (“MSCI”), and MSCI bears no liability with respect to any such BMO ETFs or securities or any index on which such BMO ETFs or securities are based. The prospectus of the BMO ETFs contains a more detailed description of the limited relationship MSCI has with BMO Asset Management Inc. and any related BMO ETFs.
An investor that purchases Units of a Structured Outcome ETF other than at starting NAV on the first day of a Target Outcome Period and/or sells Units of a Structured Outcome ETF prior to the end of a Target Outcome Period may experience results that are very different from the target outcomes sought by the Structured Outcome ETF for that Target Outcome Period. Both the cap and, where applicable, the buffer are fixed levels that are calculated in relation to the market price of the applicable Reference ETF and a Structured Outcome ETF’s NAV (as Structured herein) at the start of each Target Outcome Period. As the market price of the applicable Reference ETF and the Structured Outcome ETF’s NAV will change over the Target Outcome Period, an investor acquiring Units of a Structured Outcome ETF after the start of a Target Outcome Period will likely have a different return potential than an investor who purchased Units of a Structured Outcome ETF at the start of the Target Outcome Period. This is because while the cap and, as applicable, the buffer for the Target Outcome Period are fixed levels that remain constant throughout the Target Outcome Period, an investor purchasing Units of a Structured Outcome ETF at market value during the Target Outcome Period likely purchase Units of a Structured Outcome ETF at a market price that is different from the Structured Outcome ETF’s NAV at the start of the Target Outcome Period (i.e., the NAV that the cap and, as applicable, the buffer reference). In addition, the market price of the applicable Reference ETF is likely to be different from the price of that Reference ETF at the start of the Target Outcome Period. To achieve the intended target outcomes sought by a Structured Outcome ETF for a Target Outcome Period, an investor must hold Units of the Structured Outcome ETF for that entire Target Outcome Period.
Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. 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 BMO ETF’s 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.
This podcast is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.
®/™Registered trademarks/trademark of Bank of Montreal, used under licence.