TXPL and Related Indices Discontinued

When one checks the TXPL Index on the TMX website nowadays, the ‘overview’ section contains the following notice in large red letters:

This index has been discontinued effective April 29, 2016. Data displayed for this index is accurate as of the last trading day prior to discontinuation.

The same notice is displayed for the ‘year’ indices that provided data according to the term to reset of the various issues:

TXPL was developed in order to provide an index for BMO’s FixedReset ETF, ZPR, but this ETF hired a new index provider in October 2015. It would appear that those behind TXPL have been unsuccessful in finding a client to pay for the preparation of this index; or perhaps that there was a six-month notice period for cancellation of the contract.

I have not been able to find a formal announcement that goes beyond the bare bones on the TMX pages.

Jeff Herold, who manages NexGen Canadian Preferred Share Tax Managed Fund, comments:

As we move into May, we note the unmourned passing of the S&P/TSX Preferred Share Laddered Index. Created as a benchmark for the BMO S&P/TSX Laddered Preferred Share Index ETF, the index had no purpose once the ETF switched in October 2015 to a different index provided by Solactive. The switch allowed BMO to reduce expenses, have more frequent rebalancing, and simplify the ETF name to the BMO Laddered Preferred Share Index ETF. The changes just reinforce our conviction that bespoke indices created for unique ETF’s must be carefully evaluated for any informational value. Indices are generally not good prescriptions for how to invest, but can be used for clever marketing purposes.

Leave a Reply

You must be logged in to post a comment.