BMO launches two thematic real estate ETFs

CISI / HANetf Virtual ETF Conference – Friday 18th March 2022 – 08:30-12:15 (GMT) Online event featuring ten speakers from across the globe with a focus on ESG and thematic investing. Register Now.

BMO Investments has launched two new ETFs in Canada providing global exposure to technology-focused real estate companies and firms developing sustainable infrastructure.

Kevin Gopaul, President, ETFs, BMO Global Asset Management.

The BMO Brookfield Global Real Estate Tech Fund (TOWR CN) and BMO Brookfield Global Renewables Infrastructure Fund (GRNI CN) have been listed on Toronto Stock Exchange.

Each ETF comes with a management expense ratio (MER) of 0.90%.

The funds are actively managed and sub-advised by Brookfield Public Securities, a global investment manager overseeing more than $20 billion in listed real asset strategies.

When selecting constituents for the funds, Brookfield employs a fundamental, bottom-up approach that seeks out value stocks while considering quality metrics such as a company’s cash-flow projections and capital structure.

The weight of individual positions is based on conviction, relative value, company size, and liquidity.

Kevin Gopaul, President, ETFs, BMO Global Asset Management, said: “We are excited to offer two new ETF series with Brookfield Public Securities, a firm with recognized expertise in alternatives. Global renewables, sustainable infrastructure, and real estate tech are specialized exposures that capture significant trends in the market and can help investors build better portfolios.”

David Levi, CEO of Brookfield Public Securities, added: “We are very pleased to be able to collaborate with BMO Global Asset Management and combine Brookfield’s listed real assets expertise with BMO’s commitment to delivering client-first, innovative solutions.”

Real estate tech

The BMO Brookfield Global Real Estate Tech Fund invests in the common shares and debt of companies worldwide that are involved in the development and management of data centers, communications infrastructure, and industrial properties.

As of 3 March, over two-thirds (68.4%) of the fund was allocated to US-listed real estate companies with the next-largest country exposures being Japan (7.5%), Spain (6.4%), the UK (4.1%), and Australia (3.0%).

The sectors of logistics and communication towers each accounted for roughly 40% of the total weight, while data centres made up the remaining allocation.

Notable positions included SBA Communications (9.7%), Crown Castle International (9.7%), Equinix (9.3%), American Tower (8.9%), Digital Realty (8.4%), Prologis (7.1%), and Cellnex Telecom (6.4%).

Sustainable infrastructure

The BMO Brookfield Global Renewables Infrastructure Fund, meanwhile, focuses on infrastructure companies servicing the wind, solar, hydroelectric, geothermal, water sustainability, grid modernization, and energy efficiency sectors. Brookfield also considers ESG factors when selecting constituents for the portfolio.

US-listed stocks accounted for a little over a third (37.4%) of the total portfolio with significant exposure also allocated to stocks listed in the UK (14.1%), France (9.4%), Denmark (9.2%), and Italy (9.1%).

The renewable power and sustainable infrastructure sector accounted for more than three-quarters (76.0%) of the total weight with clean technology and water sustainability sectors accounting for 16.0% and 6.0%, respectively.

Notable positions included Nextera Energy (7.4%), National Grid (6.9%), Orsted AS (6.2%), Veolia Environment (5.5%), and SSE (5.2%).