Investment solutions that you can feel good about
In these uncertain times, finding opportunities to feel good about our actions is important. Contributing to sustainability efforts is a way to do that. Socially responsible investments like ones that focus on Environmental, Social and Governance (ESG), is a way to feel good about the positive impact your investment is making while still providing the potential for growth within your portfolio. Since the pandemic 80% of Canadians have still continued to save and invest the same amount or more than they did prior to the pandemic1 Supporting socially conscious companies with your investments is something you can feel positive about in every way.
What is ESG?
Sustainability is a top-of-mind topic for many people, as is investing in companies that align with those sustainability goals. More investors are carefully considering which investments suit their values – 79%are interested or actively investing in socially responsible companies2.Environmental, Social and Governance (ESG) are factors that provide a framework for breaking down the concept of sustainability into the three primary areas of responsible investing. A common misconception associated with sustainable investing is that it mainly involves exclusions: to exclude stocks that investors don’t want to invest in, such as tobacco and alcohol companies. This is only one method investors can use to take a more responsible approach to their investment portfolio. Other approaches include:
- Positive Inclusion - Investing in companies that have positive ESG attributes
- Thematic - Investing in ESG themes, like alternative energy, women in leadership, cybersecurity etc.
- Impact - Targeting both social/environmental impact and financial return
- Philanthropy - Delivering non-financial outcomes as the primary goal
Some ESG factors to consider when researching funds:
- Consider if the fund has ESG factors or if it targets a specific theme
- Understand how the fund excludes companies, and ensure that any holdings align with your values
- Review their proxy voting history to see their active ownership and engagement
- Look at how the fund is rated by external agencies in terms of their ESG scores
Looking for ESG investments? How about do-it-yourself ESG ETFs?
To help you better tailor your self-directed portfolio, BMO has expanded the range of ESG ETFs available to invest in through any online brokerages like BMO InvestorLine. This includes the BMO Balanced ESG ETF (ZESG) and the BMO Global High Dividend Covered Call ETF (ZWG)
About BMO Balanced ESG ETF (ZESG)
The first of its kind in Canada, the BMO Balanced ESG ETF focuses on responsible investing that incorporates environmental, social and governance (ESG) factors and follows a positive inclusion approach. Engineered for self-directed investors, they offer:
- Canadian, US and international equities and bonds, using MSCI’s environmental, social and governance (ESG) rating system
- Management expense ratio (MER) of 0.18%
- Quarterly rebalancing
BMO Global High Dividend Covered Call ETF (ZWG)
Designed to provide exposure to a dividend focused portfolio, while earning call option premiums. The underlying portfolio is yield-weighted and broadly diversified across sectors. The Fund screens for securities for dividend growth, sustainability, and option liquidity.
Benefits include:
- Invested in a diversified portfolio of high dividend global companies
- Benefits from local currency appreciation
- Call option writing reduces volatility
- Professionally managed by BMO Global Asset Management
1 Source: based on June 2020 Statistics Canada report https://www150.statcan.gc.ca/n1/pub/45-28-0001/2020001/article/00060-eng.htm
2BMO Asset Management 2019 ESG Beliefs and Behaviors Survey (Top Line Results)
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.
Commissions, management fees and expenses (if applicable) may be associated with investments in mutual funds and exchange traded funds (ETFs). Trailing commissions may be associated with investments in mutual funds. Please read the fund facts, ETF Facts or prospectus before investing. Mutual funds and ETFs are not guaranteed, their values change frequently and past performance may not be repeated.
For a summary of the risks of an investment in BMO Mutual Funds or BMO ETFs, please see the specific risks set out in the prospectus of the relevant mutual fund or ETF . 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 Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate entity from Bank of Montreal. BMO ETFs are managed and administered by BMO Asset Management Inc., an investment fund manager and portfolio manager and separate legal entity from Bank of Montreal.
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