BMO launches enhanced income ETFs in UK first

BMO Global Asset Management has launched the UK’s first suite of Enhanced Income ETFs, based on a covered call strategy.

The ETFs cover the UK, Europe and US and provide equity exposure with a sustainable, high yield derived from dividends employing a covered call option overlay.

Income is distributed quarterly with an expected total gross yield of around 5 per cent for the BMO Enhanced Income USA UCITS ETF and approximately 7 per cent for the BMO Enhanced Income UK UCITS ETF and BMO Enhanced Income European UCITS ETF.

BMO head of UK intermediary Rob Thorpe says investors continue their desperate search for yield while still seeking protection on the downside.

Rob Thorpe says the new suite of ETFs allows professional investors precisely manage their portfolios to a desired level of income, while maintaining the potential for capital gains.

Listed on the London Stock Exchange, the ETFs have OCF of 0.30 per cent.