Posted By Hint: It’s great news for long-term investors.
By Zayla Saunders, BMO ETFs
(Sponsor Blog)
Let’s talk about something that doesn’t always get the spotlight but absolutely deserves it: ETF fee cuts. BMO Exchange Traded Funds recently lowered the management fees on some of its All-in-One Asset Allocation ETFs, and this is a meaningful win for investors who care about long-term growth.
Lowering fees, even by a small amount, can have a big impact over time. Here’s what the change means, why it matters, and how it could make a difference in your portfolio.
First, What’s an Asset Allocation ETF?
If you’re into DIY investing but don’t want to micromanage your portfolio, these ETFs are your best friend. With just one ticker, you get:
- Instant diversification across stocks, bonds, and global markets
- Automatic rebalancing to keep your risk level in check
- Options for every risk profile, from conservative to all-equity.
In short: they’re a low-cost, low-maintenance way to invest.
The management fee change: 0.18% ➡️ 0.15%
As of this year, BMO has trimmed the management fee on some of its Asset Allocation ETFs: from 0.18% to 0.15%. That includes portfolios in the suite from ZCON, BMOs Conservative ETF all the way to ZEQT, the BMO All-Equity ETF.
These already-cost-efficient ETFs are now providing even greater value to investors. Over time, that reduction can translate into meaningful savings: especially when you factor in compounding.
Let’s do the Math
Say you invest $50,000 in an Asset Allocation ETF and leave it for 25 years, earning an average return of 6% annually:
- With a 0.18% fee, your portfolio would grow to around $204,384.
- At a 0.15% fee, it would grow to $205,926.
That’s $1,542 more in your pocket just from a lower management fee. And remember: this is with no extra effort, no added risk, and no change in your investment approach. Just more of your money working for you.
And if you’re investing more, contributing regularly, or holding for longer? The savings become even more impactful.
Why this matters
We’re all keeping a closer eye on costs these days, and rightfully so. Lower fees help ensure more of your investment returns stay with you. That’s especially important in periods of market volatility or when you’re working toward long-term goals like retirement, homeownership, or education savings.
BMO ETFs is committed to providing value for our investors and consistently reviewing our line up to ensure we are delivering what investors want. You ask, we listen.
Bottom line: More value, no extra work
- Lower fees = higher potential returns over time
- No action required = you can set it and forget it, or as we like to say, “Zed It, and Forget it”.
- Continued focus from BMO ETFs on helping investors keep more of what they earn
Final thoughts
Fee cuts might not be flashy or make headlines, but they’re powerful. This move by BMO ETFs is a quiet win for investors who care about long-term growth and keeping costs low. So whether you’re new to investing or a seasoned pro, know this: every basis point counts: and this change is working in your favour.
Volatility: Measures how much the price of a security, derivative, or index fluctuates. The most commonly used measure of volatility when it comes to investment funds is standard deviation.
Zayla Saunders is Senior Associate, Online Distribution for BMO Exchanged Traded Funds. As a member of BMO Global Asset Management’s ETF Direct Distribution Team, Zayla brings more than a decade of experience in finance. She holds the Chartered Investment Manager (CIM) designation is a graduate of the University of Manitoba. Since joining BMO in 2020, Zayla has focused on making ETF investing accessible through strategic partnerships content creation, and industry collaborations. Know for her client-focused expertise and investment knowledge, she empowers investors to make informed, confident decisions.
Disclaimer
Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.
The portfolio holdings are subject to change without notice. They are not recommendations to buy or sell any particular security. Past Performance is not indicative of future results.
This article is for information purposes only. The information contained herein is not, and should not be construed as investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated and professional advice should be obtained with respect to any circumstance.
All investments involve risk. The value of an ETF can go down as well as up and you could lose money. The risk of an ETF is rated based on the volatility of the ETF’s returns using the standardized risk classification methodology mandated by the Canadian Securities Administrators. Historical volatility doesn’t tell you how volatile an ETF will be in the future. An ETF with a risk rating of “low” can still lose money. For more information about the risk rating and specific risks that can affect an ETF’s returns, see the BMO ETFs’ simplified prospectus.
Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or simplified prospectus of the BMO ETFs 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 BMO ETFs, please see the specific risks set out in the BMO ETF’s simplified prospectus. BMO ETFs 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.
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