The two key strategies of Bank of Montreal are Equal weighting and currency hedging, which are used to distinguish its exchange-traded funds from such dominant incumbents as Black-Rock's iShares or Vanguard. Three of the eight new ETFs unveiled yesterday by BMO Financial Group are equal weighted and three are currency-hedged.

Hedging foreign funds back into the loonie is a well-understood policy, although one also used by iShares and some foreign mutual funds. Even there is an entire fund family called Criterion Investments focused entirely on currency hedging.

But it's the less-understood equal-weighting strategy that sets BMO off from the competition. CEO Rajiv Silgardo, formerly worked for iShares, which frequently presents traditional market-cap-weighted ETFs, as does Vanguard. ETF opponents say, market-cap-weighted funds result in a higher concentration of large-cap stocks that may be overestimated. The more overestimated they get, better is the weighting and the potentially higher risk.

In an equal weighting primer on its website, BMO says the top 10 stocks in the S&P/ TSX composite index represent almost 40% of the index's market cap. And in narrower sector ETFs, such as Information Technology, a single stock Research In Motion Ltd. makes up 83% of that index.

Both equal weighting and currency hedging are used in two new BMO ETFs focused on U. S. banks and health-care stocks. BMO Equal Weight US Banks Hedged to CAD Index ETF and BMO Equal Weight US Health Care Hedged to CAD Index ETF. Both have Management Expense Ratios (MERs) of 0.35%.