E166 – Wave of Downgrades Hits High-Yield Bonds

BMO ETFs: Views from the Desk

Bond markets are once again grappling with the spectre of higher interest rate increases from the Fed, with high-yield issuers facing the fastest pace of ratings downgrades since early 2020. On today’s episode, portfolio managers Winnie Jiang, Alfred Lee and your host Mckenzie Box explore how investors should position their current fixed-income exposures. They also discuss the resurgence of Canadian REITs this year as the Bank of Canada pauses its rate-hiking cycle for the time being, while also diving into the steepening yield-curve inversion and what it portends for the so-called soft- and hard-landing scenarios for the U.S. and Canadian economies. Read the full episode summary.

Mckenzie Box is Director of Product and Strategy at BMO Global Asset Management. She is joined on the podcast by Alfred Lee and Winnie Jiang, Portfolio Managers and ETF Specialists at BMO Global Asset Management. The episode was recorded live on March, 9, 2023.

ETFs mentioned in the podcast:

• BMO Mid-Term US IG Corporate Bond Index ETF (Ticker: ZIC)
• BMO High Yield US Corporate Bond Hedged to CAD Index ETF (Ticker: ZHY)
• BMO High Yield US Corporate Bond Index ETF (Ticker: ZJK)
• BMO Floating Rate High Yield ETF (Ticker: ZFH)
• BMO Equal Weight REITs Index ETF (Ticker: ZRE)
• BMO Short Corporate Bond Index ETF (Ticker: ZCS)
• BMO High Quality Corporate Bond Index ETF (Ticker: ZQB)

Disclosure:

The viewpoints expressed by the Portfolio Manager represent their assessment of the markets at the time of publication. Those views are subject to change without notice at any time without any kind of notice. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance. Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance.

Commissions, management fees and expenses (if applicable) all may be associated with investments in BMO ETFs and ETF Series of the BMO Mutual Funds. Please read the ETF facts or prospectus of the relevant BMO ETF or ETF Series before investing. BMO ETFs and ETF Series 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 or ETF Series of the BMO Mutual Funds, please see the specific risks set out in the prospectus. BMO ETFs and ETF 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.

BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal. ETF Series of the BMO Mutual Funds are managed by BMO Investments Inc., which is an investment fund manager and a separate legal entity from Bank of Montreal.

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