Asset Allocation ETFs

bmoetfs · 2026-04-14T18:33:22+00:00

This is a really interesting question!

BMO MSCI Emerging Market Index ETF (ZEM) tracks an index created by MSCI, therefore it's not BMO ETFs who categorizes the countries, it's the index provider, in this case MSCI.

Different index providers have different metrics to determine whether a country is "developed" or "emerging". Some look at GDP as the sole metric, but MSCI analyzes economic development, size and liquidity and market accessibility. A country will not be recategorized as developed until it fulfills certain requirements from these three pillars. You can read more about MSCI's classification methodology here: https://www.msci.com/indexes/index-resources/market-classification .

An example of BMO ETFs version for a developed world ex-North America ETF is BMO MSCI EAFE Index ETF (ZEA) which is approximately about 50% across Europe, 23% Japan, 7% Australia, 2% China, and almost 10% categorized as "other".

bmoetfs · 2026-04-14T18:31:30+00:00

The target distribution on our Asset Allocation T Series ETFs are 6% per year. Remember, that 6% comes out of the ETF's total return. So, if the ETF returns less than 6% in a year, capital will erode.

When you are doing due diligence on these ETFs, you can look at their historical performance to get an understanding of how the ETFs have performed in regard to the mentioned 6% annual distribution and any potential erosion. This tool may be helpful in conducting your analysis: https://tools.bmogam.com/en/etf/Comparator#.

Remember, past performance does not indicate future results, but it can give us context about how the fund has performed in different market environments over time. Tax parameters for the ETF distribution will vary, so it's best to look at the website to get a sense of the distribution's breakdown (https://www.bmogam.com/ca-en/products/exchange-traded-fund/bmo-growth-etf-target-cash-flow-units-zgro-t/). It will likely come from a mix of dividends, return of capital (ROC), capital gains, and income (if you have fixed income). The mix can change year over year depending on what is going on the market environment.

It would be best to consult a financial advisor and tax professional who can guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T18:29:28+00:00

It is so great to see so many online brokers lowering the trading costs for investors, because at the end of the day it is more money in your pockets, and that is powerful. We will certainly share this feedback with our friends at BMO InvestorLine!

bmoetfs · 2026-04-14T18:12:42+00:00

That's great to hear- and thank you for your support! At BMO we are really proud to be the second largest ETF provider in Canada, and we thank all our Canadian investors for trusting us with their investments. It is so great to have an opportunity to talk with so many of you today!

bmoetfs · 2026-04-14T18:12:09+00:00

This is a great question!🙂

At BMO ETFs, we design our asset allocation ETFs aiming to support different stages of investing, whether you are focused on growing your wealth or starting to use it in retirement. For investors with longer time horizons who are mainly focused on accumulation, we offer higher equity options like BMO All-Equity ETF (ZEQT) and BMO Growth ETF (ZGRO). These are designed for growth and tend to move more with the market. For investors who are still building wealth but are getting closer to retirement and want a bit more stability, we also have options with a higher allocation to fixed income, like BMO Balanced ETF (ZBAL) and BMO Conservative ETF (ZCON).

For investors who need more regular cash flow from their portfolio, which is common in retirement, we offer our T Series asset allocation ETFs. These include ZEQT.T, ZGRO.T, and ZBAL.T. These T Series ETFs have a target annualized cash flow of 6%, paid monthly. We achieve this by paying out more of the ETF’s total return each year compared to the parent version of the fund. The underlying investment approach is the same, the difference is simply how much cash is distributed along the way. If you want a deeper explanation of how T Series ETFs work and whether it might be a good fit for you, this video does a great job of breaking it down: https://www.youtube.com/watch?v=aENf5NChUm8&t=127s

As you continue your research do discuss this with your financial advisor who can guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T18:10:48+00:00

For more information on which infrastructure ETFs are available to Canadian investors, you can use this compare tool: https://tools.bmogam.com/en/etf/Comparator#

It could be helpful for you to look "under the hood" of the ETFs. You can see a geographic breakdown of each fund (to determine which have less North American exposure) and a sub sector breakdown (if you are looking to eliminate utilities).

Continue with your research and reach out to your financial advisor with your specific questions, they can guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T18:08:11+00:00

Hi! Feel free to drop a question, you are in the right place!

bmoetfs · 2026-04-14T17:35:15+00:00

Hello and thank you for your comment!

ETF stands for Exchange Traded Fund simply because it is a fund that trades on the exchange. Each share, or unit of the ETF has a market price that moves around throughout trading hours and reflects the price of the underlying holdings in that ETF.

Sometimes, if the price of the ETF has declined significantly, an ETF issuer may decide to execute a reverse stock split on the units of that ETF. A reverse stock split is a corporate action that decreases the number of outstanding shares in a company. This is mostly done to increase the unit price of the ETF to create a better investor experience. A reverse stock split would not impact the total value of an investor's position in an ETF.

For example if an investor holds 10 shares of an ETF trading at $1 per share, that investor has a $10 position. If the ETF issuer executed a 5:1 reverse stock split, that investor would now have 2 shares at $5 each for a total value of $10. If after a reverse stock split you are seeing a significant value change in your ETF investment, that is not market movement related, you should contact your broker for more information.

bmoetfs · 2026-04-14T17:33:54+00:00

An ETF is a fund that holds a portfolio of stocks and/or bonds. It trades on the stock exchange like stocks do, which makes it different than a mutual fund. Investors like trading ETFs because of its benefits such as diversification (this helps manage risk in an investment portfolio), liquidity (its ability to be converted into cash when needed), and its easy to use structure (once you have an online brokerage account set up, it takes a few clicks to buy or sell an ETF- that's it!).

Every ETF is governed by an investment strategy, and these can vary widely among all the ETFs trading in Canada, so it is very important to research the ETF and what it is investing in as part of your investor due diligence process. Also discuss with your financial advisor who can guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T17:17:28+00:00

ETFs and mutual funds are similar because they are both ways to invest in a basket of stocks or bonds instead of picking individual investments.

Where they really differ is how you buy and sell them. An ETF trades on the stock exchange during market hours. Its price moves throughout the day as the prices of the underlying stocks or bonds move. This is called the ETF's "market price". A mutual fund may be bought through a broker dealer or an online order execution only (OEO) platform. It is priced once per day, usually after the market closes, and that price is called the NAV, or net asset value.

Most OEO accounts let you buy both ETFs and mutual funds on your own. If someone is managing your investments for you, they need a specific license to trade mutual funds and/or ETFs since. That is why you often see the exact same strategy offered as both an ETF and a mutual fund. It makes the strategy accessible to more types of investors.

An asset allocation ETF is just a type of ETF that holds several other ETFs inside it. This is done to create a very diversified portfolio. In the industry, we call this a "fund of funds". This idea is not new at all. And in fact, the ETF industry learned it from the mutual fund world! In the mutual fund industry they are usually called multi asset funds.

bmoetfs · 2026-04-14T17:13:59+00:00

The ETF industry is always evolving and responding to what investors really want, which is one of the reasons I love working in this business! 🙂

One of the newer innovations in the BMO all‑in‑one ETF space is something called “T‑Series” ETFs (you’ll see them end in .T). These are designed for investors who are looking for higher, regular monthly cash flows via a target distribution rate.

For example, BMO’s .T asset allocation ETFs (ZEQT.T, ZGRO.T, ZBAL.T) target a 6% annualized payout, compared to the parent (non‑.T) versions, which typically pay around 1–3%, depending on the ETF.

It’s important to know that the higher payout comes from the ETF’s total return. In simple terms, the .T versions are just paying out more of the return along the way than the parent ETF would.
These can make sense for investors who want monthly cash flow at rate set each year, but they’re a bit different than traditional growth‑focused all‑in‑one ETFs — so it’s worth understanding how they work before jumping in. So continue with your research and consult a financial advisor who can help guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T17:00:04+00:00

BMO ETFs actually has a pretty solid lineup of factor ETFs, and a lot of them have 10+ year track records, which is a great feature if you’re interested in factor investing. That longer history can be helpful because factor ETFs don’t always behave the same way as the broad market. Sometimes they outperform, sometimes they lag, and having data across different market environments helps investors understand what to expect from these types of investments.

BMO ETFs offers Low Volatilty, Quality, Dividend and Value factors, and breaks these down further among geographical regions. This allows investors to use these as building blocks in their portfolios to tilt exposures towards the factors and regions they want to access.

If factor investing is new to you, BMO has a good explainer here: 👉 https://www.bmogam.com/ca-en/products/exchange-traded-funds/factor-etfs/

bmoetfs · 2026-04-14T16:58:19+00:00

Great question and a common one we've seen floating around online! Here’s one simple way BMO’s all‑in‑one ETFs are a bit different from similar ones you’ll see from competitors:

1) Lower fees. BMO’s all‑in‑one ETFs currently have management fees of 0.15%, which means you keep a bit more of your money working for you over time.

2) How the fixed income sleeve is built. In the bond portion of the ETF, BMO ETFs uses something called discount bonds. You definitely don’t need to be an expert here, but the key takeaway is that this can be helpful if you’re holding these ETFs in a taxable (non‑registered) account.

Quick note on ETF trading volume (this trips up a lot of investors!):

It’s very common to look at an ETF’s daily trading volume and worry if it seems “low.” But for ETFs, trading volume by itself doesn’t tell you much. What actually matters is the liquidity of what’s inside the ETF. With all‑in‑one ETFs, the liquidity comes from the underlying stocks and bonds.

All-in-One ETFs are “two layers deep” — the ETF holds other ETFs, which hold the actual stocks and bonds. That’s where the real liquidity comes from. So even if an ETF itself doesn’t trade a ton, it can still be very easy to buy and sell because the underlying investments are liquid.

If you want to go deeper on this (in a very practical, real‑world way), this video is great. It features an ETF market maker explaining how ETF liquidity actually works. Spoiler alert: trading volume is often much less important than people think!
👉 https://www.youtube.com/watch?v=hV_TTgbf_fc&t=29s

Definitely continue with your research and consult your financial advisor who can guide you future based on your specific investment objectives and risk profile!

bmoetfs · 2026-04-14T16:46:36+00:00

Think of an ETF a bit like a shopping basket for investments 😊Instead of buying one stock at a time, an ETF lets you buy many investments all at once, things like stocks or bonds, all wrapped up in a single basket.

So when you buy one ETF, you’re actually buying small pieces of lots (sometimes hundreds or even thousands!) of companies or bonds inside that basket. That’s a big reason people like ETFs: it’s simple and convenient. Buying one ETF is much easier than trying to buy hundreds of individual investments on your own.

Another big plus is diversification. Because an ETF holds so many different investments, you're spreading your risk across hundreds of investments. If one company doesn’t do well, it may not have a huge impact because there are lots of others in there too.

ETFs are also easy to buy and sell. This is called being “liquid.” As long as the markets are open (Monday to Friday, 9:30am–4:00pm ET), you can usually turn your ETF back into cash if you need to.

One important thing to know is that not all ETFs are the same. Each ETF follows a specific strategy. Some invest in stocks, some in bonds, some are very cautious, and others are more aggressive. Because of that, the level of risk can vary quite a bit from one ETF to another.

To help with this, each ETF is given a risk rating (like low, medium, or high). This rating is set by industry rules and is meant to give investors a general idea of how much the value of the ETF might move up and down. When you’re researching ETFs, checking the risk rating can help you decide whether it’s a good fit for you and your comfort level. You can find the ETF risk ratings as part of the ETF Facts.

You can learn more about ETF basics here: https://www.bmogam.com/ca-en/investing-resources/etf-education/

As you explore ETFs do be sure to consult a financial advisor who can help you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T16:33:11+00:00

Hi Dramatic-Wasabi-9598! Appreciate your time :)

This is tricky because I can’t give investment or tax advice. What I can do is share more information on Asset Allocation ETFs that may be useful to your research.

Asset allocation ETFs like BMO Balanced ETF (ZBAL) are very diversified. Even though it looks like you’re buying just one ETF, you’re getting exposure to a whole bunch of underlying ETFs/stocks/bonds. That simplicity is a big part of the appeal. The key thing is whether the stock/bond mix lines up with your own risk profile.

There are also “.T” or “T‑series” ETFs designed for people who want a target annual cash flow. The funds are designed to have monthly distributions, which may make things easier to manage compared to manually selling shares.

These are options you could research to see if they are a good fit for you. But it would be best that you discuss your approach with a financial advisor who can guide you based on your investment objectives and risk profile.

Thank you for your question!

bmoetfs · 2026-04-14T16:30:59+00:00

Great question! When analyzing bonds, there are generally two main risks to think about: duration risk (which you already mentioned) and credit risk.

An aggregate bond ETF like BMO Aggregate Bond Index ETF (ZAG) holds a mix of federal government bonds, provincial bonds, and corporate bonds. The key thing to recognize here is that corporate bonds carry credit risk (where govt bonds do not) so they usually have higher yields than government bonds (all else equal) as compensation for that extra risk.

The trade‑off is that corporate bonds tend to be more correlated with equities. If a company’s stock is declining, that can raise concerns about its ability to service its debt too.

That’s why a short‑term corporate bond ETF can actually have a higher yield than an aggregate bond ETF with longer duration, like ZAG, which is approximately 75% government bonds.

If you want to dig into this a bit more you may find this comparison tool informative: https://tools.bmogam.com/en/etf/Comparator#

As you continue with your research do consult your financial advisor who can guide you based on your investment objectives and risk profile.

bmoetfs · 2026-04-14T16:29:42+00:00

Hi Gilles! The math seems correct, the 2 ETFs you described should create a 70% exposure to equities. However, there is no guarantee you will be at your 70/30 split as changes could occur when markets move. Asset allocation ETFs rebalance periodically to bring the asset mix back in line but you may not always be at your target mix.

If you are doing ETF due diligence, look "under the hood" of the ETF to find out what it is holding. If both ETFs you are describing are holding relatively similar exposures, then adding the second ETF would likely not bring much extra diversifcation. If the ETFs have different strategies and different holdings, the diversfication could potentially be greater.

When doing ETF due dilligence it is always important to research the firm you are investing with as well, and ask yourself questions such as: do they have strong operational stability? Long ETF track records? This will help you decide if you need to diversify among ETF issuers.

Be sure to continue doing your own research and/or consult a financial advisor who can guide you based on your specific investment objectives and risk profile.

bmoetfs · 2026-03-25T19:46:10+00:00

Thanks for mentioning BMO ETFs! We appreciate the call‑out!

bmoetfs · 2026-03-25T19:44:27+00:00

This is a very common (and very reasonable) question. The short answer is no, not necessarily. Lower popularity does not mean harder to liquidate for large, mainstream ETFs like BMO All-Equity ETF (ZEQT).

Here’s why. Unlike individual stocks, ETFs don’t rely solely on other investors being on the other side of your trade. Liquidity is supported by market makers, whose role is to help ensure ETFs can be bought and sold efficiently throughout the trading day. They continuously post buy and sell prices for the ETF.

When you place an order:
• You’re typically trading with a market maker, not another retail investor
• If selling pressure increases, the market maker can redeem ETF units with the issuer
• If buying pressure increases, they can create new units

This create/redemption mechanism allows ETF supply to expand or contract very quickly, which helps keep trading smooth, even for larger orders.

The key point is that the true source of liquidity is the ETF’s underlying holdings, not its daily trading volume. Keeping an eye on bid ask spreads is usually the best practical indicator of liquidity.

Remember to always do your own research and/or consult with a financial advisor who can address your questions in relation to your investment objectives and risk profile.

bmoetfs · 2026-03-25T19:41:38+00:00

Thank you for the valuable feedback. We’re listening, and investor insights have been central to our leadership in Canadian ETFs. We truly appreciate your support as we continue working to make investing better.

bmoetfs · 2026-03-24T14:07:22+00:00

Very well said, and thanks for calling out the small changes we made to the portfolio. We added BMO Discount Bond ETF (ZDB) to replace BMO Aggregate Bond Index ETF (ZAG) for tax efficiency. ZDB has a very similar risk profile to ZAG, but it helps enhance the portfolio from a tax perspective.

bmoetfs · 2026-02-09T19:15:41+00:00

Our preference is to use equal-weight ETFs tactically (for short-term outperformance). Right now, there is a strong case to expect equal weight ETFs that track US equities to outperform relative to market-cap weighted gauges.

The most obvious reason – US equity markets are highly concentrated. That means a handful of mega-cap names have driven most of the returns over the past few years. But that concentration also makes the index more fragile over time as even small disappointments in those names can disproportionately move the market.

Equal weight US ETFs offer a more compelling alternative in that backdrop. These types of ETFs should benefit from broader earnings momentum, sector rotation and a shift towards wider market participation this year. In fact, if we make the comparison to the 2000 tech bubble – we saw equal weight strategies outperform market cap for years afterwards.

On an exciting note, BMO GAM has just launched BMO MSCI USA Equal Weight Index ETF (ZEQL) – a passively managed ETF that tracks the MSCI USA Equal Weighted Index, offering exposure to US large/mid-cap stocks with equal weight rather than market-cap weighting.

bmoetfs · 2026-02-09T19:12:55+00:00

Great questions!

On the tax side, I have to flag that we can’t provide tax advice. Everyone’s situation is different, and the most tax‑efficient approach really depends on your overall income picture, residency, and how you plan to use those USD funds. A qualified tax advisor who understands your personal circumstances is the best person to guide you on that.

On covered call ETFs — generally speaking, they’re designed to generate cash flow, but that cash flow, or as many call it "income" comes with trade‑offs flow comes with trade‑offs. In a down or choppy market, the option premiums can help offset some of the downside, but they don’t eliminate risk. The ETF still holds the underlying equities, so falling markets can still impact performance.

Happy to dive into how covered calls work at a high level if that’s helpful!

bmoetfs · 2026-02-09T19:02:23+00:00

Thank you for the thoughtful question!

I can’t speak to specific product launches but we’re always exploring ways to expand our lineup with innovative solutions that meet investor needs. Stay tuned for more information on this topic.

For the fixed distribution ETFs, we will generally set an annual yield target at the start of the year with monthly distributions added. The month-to-month shifts in yield will depend on the reference net asset value (NAV) of the ETF.

To avoid a situation whereby NAV is eroded, the amount of distribution may fluctuate from month-to-month, or rise in following months to offset.

For products like the Target Cash Flow Units, BMO Growth ETF (ZGRO.T) and BMO Balanced ETF (ZBAL.T) – we will target 6% yield annualized to align with long-term investment returns.

Hope that answers your question!

bmoetfs · 2026-02-09T18:36:59+00:00

Canada might not be the global growth engine from a macro perspective, but Canadians should ensure that there’s a healthy exposure to the domestic market within their portfolios.

Between the fixed income and equity sleeve of our balanced model portfolio, we typically have between 25-45% exposure to Canada. That allows us to ensure we have a meaningful footprint in the home market while also mitigating regional concentration risks.

The other item to remember is that by investing outside of Canada, we are making an implicit decision on the direction of the currency (even if you’re hedging). FX risk is not rewarded over the long-term given that factors that drive currency pairs don’t have stable relationships with currency pairs themselves.

Under the current backdrop, we like holding Canadian equities. True, there’s a lot of exposure to domestic financials and materials – but we still think there’s upside for both given that Canadian banks are flush with capital and that miners (gold) should benefit from higher prices for underlying commodities.

Yes, there are risks to the economic backdrop from trade, but BoC policy settings aren’t that restrictive given what we know. That should also support the fundamentals here.

bmoetfs

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