News Releases

TORONTO, ONTARIO--(Marketwire - June 8, 2011) - BMO Asset Management Inc. (BMO AM) released the results of a study today revealing that unfamiliarity with Exchange Traded Funds (ETFs), which are securities that can track indexes but are traded like stocks, is the key barrier to increased adoption rates in Canada.

• Almost half (46 per cent) of those who hold investments indicate that they have not invested in ETFs because they remain unfamiliar with them.
• However, when told about the benefits of ETFs, including low management fees, transparency and tax efficiencies, almost 60 per cent of Canadian investors (59 per cent) indicated they would add them to their investment portfolios.

"It's not surprising to see that, once Canadians learn about the advantages of ETFs, they are more open to investing in them," said Kevin Gopaul, VP & CIO, BMO Exchange Traded Funds. "Exchange traded funds offer efficient and effective access to a wide variety of asset classes and global markets, providing investors with an innovative product that meets their needs."

While the study indicates 58 per cent of Canadians currently invest, only 15 per cent of them are familiar with ETFs and only four per cent hold ETFs.

Mr. Gopaul noted that investors often take time to familiarize themselves with new investment products. He pointed out that slightly more than one-third of Canadians (37 per cent) hold mutual funds, which have been in existence for close to 100 years. ETFs, on the other hand, have only been available since the early 1990s.

Canadian ETF Market Growing

"We believe it is critical to build awareness of ETFs and educate Canadians about their benefits, which is why BMO Asset Management was one of the founding members of the Canadian ETF Association," said Mr. Gopaul. "The ETF industry is evolving and growing at a rapid pace and we want Canadians to be able to capitalize on this great investment option."

BMO AM's ETF business recently crossed $2.5 billion in assets under management, less than two years after launching their first ETFs. Its commitment to the ETF market is evident in its continual search for new and innovative products. It currently offers 40 ETFs in its product portfolio.

Other Key Survey Findings:

• Men are more likely to be familiar with ETFs compared to women (19 per cent versus 11 per cent).
• Ontario (20 per cent) and B.C. investors (24 per cent) are more likely to say low management costs would increase their likelihood of investing in ETFs compared to those in the Prairies (seven per cent).
• Alberta residents are more likely to be investors (69 per cent), compared to other provinces.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $413 billion as at of April 30, 2011, and more than 38,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

The online survey was conducted by Leger Marketing from May 24th to May 26th, 2011, with a sample of 1500 Canadians, 18 years of age or older. A probability sample of the same size would yield a margin of error of ±2.5% 19 times out of 20.