E250 – Decoding Q4 Canadian Bank Earnings

BMO ETFs: Views from the Desk

In this special episode, Sohrab Movahedi, Bipan Rai, and Skye Collyer take a deep dive into Canada’s Big Six, from recent earnings results and valuations to expectations for 2025.

ETFs:

• BMO Equal Weight Banks Index ETF (ZEB)
• BMO Canadian Bank Income Index ETF (ZBI)
• BMO Aggregate Bond Index ETF (ZAG)
• BMO Covered Call Canadian Banks ETF (ZWB)
• BMO Covered Call Canadian Banks ETF (USD Units) (ZWB.U)
• BMO Canadian Bank Accelerator ETF (ZEBA)

ZEB, total returns as of 2024/11/30: 1 yr: 39.76%, 3yr: 9.68%, 5 yr 11.92%, 10 yr: 9.89%, SI: 11.25%

ZAG, total returns as of 2024/11/30: 1 yr: 8.50%, 3yr: 0.12%, 5 yr 0.60%, 10 yr: 1.97%, SI: 2.91%

ZBI, total returns as of 2024/11/30: 1 yr: 13.59%, SI: 3.61%

Terminal Rate: The interest rate level a central bank believes is consistent with a balanced economy over the long term.

Yield to maturity: The total expected return from a bond when it is held until maturity.

Duration: A measure of a bond's sensitivity to changes in interest rates.

Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

Operating Leverage: A measure of how revenue growth translates into operating income growth.

Disclaimers: The viewpoints expressed by the speakers represents their assessment of the markets at the time of publication that are subject to change without notice at any time.

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.

An investor that purchases Units of a Structured Outcome ETF other than at starting NAV on the first day of a Target Outcome Period and/or sells Units of a Structured Outcome ETF prior to the end of a Target Outcome Period may experience results that are very different from the target outcomes sought by the Structured Outcome ETF for that Target Outcome Period. Both the cap and, where applicable, the buffer are fixed levels that are calculated in relation to the market price of the applicable Reference ETF and a Structured Outcome ETF’s NAV (as Structured herein) at the start of each Target Outcome Period. As the market price of the applicable Reference ETF and the Structured Outcome ETF’s NAV will change over the Target Outcome Period, an investor acquiring Units of a Structured Outcome ETF after the start of a Target Outcome Period will likely have a different return potential than an investor who purchased Units of a Structured Outcome ETF at the start of the Target Outcome Period. This is because while the cap and, as applicable, the buffer for the Target Outcome Period are fixed levels that remain constant throughout the Target Outcome Period, an investor purchasing Units of a Structured Outcome ETF at market value during the Target Outcome Period likely purchase Units of a Structured Outcome ETF at a market price that is different from the Structured Outcome ETF’s NAV at the start of the Target Outcome Period (i.e., the NAV that the cap and, as applicable, the buffer reference). In addition, the market price of the applicable Reference ETF is likely to be different from the price of that Reference ETF at the start of the Target Outcome Period. To achieve the intended target outcomes sought by a Structured Outcome ETF for a Target Outcome Period, an investor must hold Units of the Structured Outcome ETF for that entire Target Outcome Period.

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