Attention DIY investors: Go beyond basics with asset allocation ETFs
How can investing in them lead to higher returns?

Do you manage your own DIY portfolio? Are you interested in getting started? Canadians of all ages, from millennials to retirees, are discovering how B M O Asset Allocation ETFs can help them get the most out of their investments.
Getting started with ETFs
As a DIY investor, you’ve already considered your investment goals, and you have a good idea about when you’ll need your money. You’re already making regular contributions, and you know that there are lots of online tools and resources that can help you find the right investments, the ones that will deliver the results you need. You’re probably familiar with mutual funds, ETFs and GICs, but did you know that there are new investment products – asset allocation ETFs – that can also be ideal for DIY investors?
What are asset allocation ETFs?
As you might know, an exchange-traded fund (E T F) is an investment fund that holds a variety of assets. These range from broad-based global equities, or collections of stocks that reflect the market as a whole, to fixed-income solutions, such as government-issued bonds. They also give you an opportunity to gain access to specific global markets, or to specific types of companies, such as technology firms, or to stocks that meet your specific needs, because they’ve always paid a dividend.
Asset allocation refers to the amounts of each fund that are allocated to fixed income, equity, and cash. Each of these assets has different benefits. Fixed income provides security and income, equity offers long-term growth and inflation protection, and cash offers safety and liquidity.

Why should you consider B M O Asset Allocation ETFs?
Overall, Canadian investors call themselves cautious rather than optimistic: 71% like to play it safe, and only 26% believe they’ll get the best returns possible from their investments. footnote 1
Because BMO Asset Allocation ETFs are a complete investment product, they can serve as a perfect complement to the existing investments in your DIY portfolio. This can make them an ideal option for both new and experienced DIY investors. They can be used as a core long-term investment, or to fine-tune your holdings, especially during times of market volatility.
How can asset allocation ETFs help DIY investors?
Even more than the individual stocks in a fund, the mix of cash, fixed income and equity will have the largest impact on your long-term returns. Your choice of asset mix – conservative, balanced or growth – should be based on your personal risk/return profile.
With a longer investing time horizon, you have more time to recover from short-term losses. In this situation, choosing an asset allocation mix with more equity could lead to greater growth over time. If you’re closer to retirement, you may prefer a mix with more cash or fixed income products.
How will you benefit from asset allocation ETFs?
Choice: The options available in asset allocation ETFs let DIY investors select the portfolio that best matches their individual investment needs, risk profile, return objectives and time horizon.
Diversification: With a single investment, DIY investors can gain access to both global equity and fixed income markets.
Low cost: Asset allocation ETFs are among the lowest-cost portfolios available to self-directed investors, and there’s no added cost for the underlying holdings.
Disciplined investment process: Fund managers constantly monitor and rebalance asset allocation ETFs to manage risks, so your investments will stay on target.
Tax efficiency: Selling a stock that’s gained value means you pay a tax on the capital (or profit) you gained while you owned the stock – that’s what capital gains tax means. But because ETFs tend to have little turnover in the stocks that they hold (especially compared to equity-based mutual funds), ETFs trigger relatively lower capital gains tax liabilities than other investments.
B M O Asset Allocation ETFs are the newest and lowest-cost option in this category. As a DIY investor, you’ll find that asset allocation ETFs can make it simple to keep your investments balanced and well-rounded.
Where can DIY investors buy asset allocation ETFs?
There are many ways to buy B M O Asset Allocation ETFs. They’re available on B M O InvestorLine and from your bank
Ready to start investing?
Start investing online with BMO InvestorLine Self-Directed.
Have questions?
Commissions, management fees and expenses (if applicable) all may be associated with investments in exchange traded funds. Please read the E T F Facts or prospectus before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.
For a summary of the risks of an investment in the B M O ETFs, please see the specific risks set out in the prospectus. B M O ETFs and E T F series 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.
B M O ETFs are managed by B M O Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.
The opinions and views expressed in this presentation are those of the presenter and not necessarily B M O InvestorLine Inc. This presentation is prepared as a general source of information and is not intended to provide legal, investment, accounting or tax advice, and should not be relied upon in that regard. If legal or investment advice or other professional assistance is needed, the services of a competent professional should be obtained. Any information contained in this presentation does not constitute and shall not be deemed to constitute advice, an offer to sell/ purchase or as an invitation or solicitation to do so for any entity. The content of this presentation is based on sources believed to be reliable, but its accuracy cannot be guaranteed. B M O InvestorLine Inc. and its affiliates, sponsors and employees do not accept responsibility for the content and makes no representation as to the accuracy, completeness or reliability of the content and hereby disclaims any liability with regards to the same.
Footnotes
Footnote 1 details 2018 Annual T F S A/R R S P Study by B M O in partnership with Pollara Strategic Insights