RPT-Bank of Montreal ETFs pass C$2 bln in assets

(Repeats to widen distribution

* BMO aiming for 10 pct of C$40 bln ETF market

* Passes C$2 bln mark well ahead of October target

* More ETFs in the pipeline

TORONTO, April 1 (Reuters) – Bank of Montreal (BMO.TO: Quote, Profile, Research) said
on Friday its exchange traded fund business has reached C$2
billion ($2.06 billion) in assets under management less than
two years after it was launched, which it said was well ahead
of target.

Canada’s fourth-largest bank, with assets of C$413 billion
as of Jan. 1, has a stable of 40 ETFs, investment vehicles that
own an array of stocks, similar to mutual funds, but which have
shares that are traded on public exchanges.

ETFs have been attracting strong investment inflows in
recent years due to low fees and greater transparency for
investors. Unlike mutual fund shares, which are re-priced once
a day, the price of an ETF is publicly quoted and visible
throughout the day.

BMO Asset Management launched its ETF business in June
2009, and it surpassed C$1 billion in assets last September.
The goal was to reach C$2 billion in assets by the end of
October 2011, Rajiv Silgardo, BMO Asset Management’s chief
executive said in an interview.

“Going forward, we think we should be able to capture at
least a 10 percent share of the ETF market in Canada in the
next three to five years,” he said, estimating that Canada’s
ETF market currently stands at around C$40 billion.

Blackrock Inc (BKT.N: Quote, Profile, Research), which acquired Barclays Global
Investors and its iShares franchise in 2009, is the largest
issuer of ETFs in the world. It also dominates the Canadian ETF
market with C$31.2 billion in assets under management.

Silgardo joined BMO Asset Management in 2009 after heading
Barclays Global Investors Canada Ltd since 2004, where he
developed computer-driven strategies for Canadian stocks and
helped establish Barclays’ ETF business in Canada.

He said BMO Asset Management has a number of new ETF ideas
on the drawing board, but did not elaborate further.

Last year, his unit focused on bringing ETFs to market that
would give investors exposure to India, China and other
emerging countries, and to high yield.

This year the focus on high yield has continued with
target-maturity-type fixed income ETFs, which give investors
not only the yield from the fixed income markets, but also
diversification and a maturity date.

“Unlike with a normal fund, where there’s no maturity date,
investors know that their investments here will actually become
a money market portfolio on a specific date, so they don’t have
to worry about interest rate movements and so on through the
period,” Silgardo said.

BMO also recently launched a covered-call banks ETF, which
is an equally weighted portfolio of the big six Canadian banks,
all of which have dividend yields close to 4 percent.

This ETF also has an option overwriting strategy, which
means that when it sells call options, it earns income which is
added to the income of the ETF.

($1=$0.97 Canadian)
(Reporting by John McCrank; editing by Peter Galloway)

RPT-Bank of Montreal ETFs pass C$2 bln in assets