BMO Monthly High Income Fund II (the “Fund”) · 2020. 3. 27. · financial statements of the...

BMO Monthly High Income Fund II (the “Fund”) For the 12-month period ended December 31, 2019 (the “Period”)

Manager: BMO Investments Inc. (the “Manager” or “BMOII”)

Portfolio Manager: Guardian Capital LP, Toronto, Ontario (the “portfolio manager”)

2019 Annual Management Report of Fund Performance

This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the Fund. If the annual financial statements of the Fund do not accompany the mailing of this report, you may obtain a copy of the annual financial statements at your request, and at no cost, by calling 1-800-668-7327 and 1-800-665-7700, by writing to us at BMO Investments Inc., First Canadian Place, 43rd Floor, 100 King Street West, Toronto, Ontario, M5X 1A1 or by visiting our website at www.bmo.com/gam/ca and www.bmo.com/mutualfunds or SEDAR at www.sedar.com. You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record and/or quarterly portfolio disclosure.

MANAGEMENT DISCUSSION OF FUND PERFORMANCE

Investment Objective and Strategies The Fund’s objective is to generate a high level of monthly distributions with moderate volatility by investing primarily in a portfolio of trust units, equity securities and fixed income securities.

The portfolio manager invests in trust units, such as royalty trust units and real estate investment trusts from various sectors of the economy. The portfolio manager may also invest in common equities, typically demonstrating large market capitalizations and above average dividend yields.

Risk The risks associated with an investment in the Fund remain as disclosed in the Fund’s most recent simplified prospectus or any amendments thereto and fund facts. During the Period there were no changes to the Fund that materially affected the overall risk level associated with an investment in the Fund. However, on May 10, 2019, the Manager reviewed the Fund using the standardized investment risk classification methodology prescribed by National Instrument 81-102 Investment Funds and determined that the risk rating of the Fund had changed from “medium” to “low to medium”. The Manager reviews the Fund’s investment risk level and reference index, if any, at least annually.

Results of Operations During the Period, the Fund’s total net asset value changed from approximately $959 million to approximately $938 million. Advisor Series units of the Fund returned 18.34%. Please see the Past Performance section for information on the performance returns of the Fund’s other series.

During the Period, Canadian equity markets rebounded sharply, with the S&P/TSX Composite Index returning 22.9%, following the dramatic selloff in late 2018. Stock prices strongly rebounded in the first quarter of 2019 and then moved sideways with some volatility through the middle of the year, before resuming their upward trajectory into the year end. The strong performance was driven by normalization in investor sentiment from very bearish levels late 2018. This was supported by the potential for a positive resolution in the U.S.-China trade dispute and the announcement of a “phase one” trade deal in mid-December. The signs of a stabilizing global economic backdrop and continued lowering of interest rates in the U.S. also boosted equities. This rebound in equity markets occurred despite a deceleration of global growth and corporate earnings for much of the Period. The S&P/TSX Composite High Dividend Index returned 25.8% during the Period, which was led by the Utilities sector (+39.6%), followed by Energy (+27.1%) sector.

Defensive sectors such as Utilities and Real Estate, along with Information Technology led for much of the year; however, market leadership shifted to cyclicals and economically sensitive sectors in the fourth quarter of 2019 (“fourth quarter”). After trailing the broader market for much of the Period, the Energy sector rallied strongly in the 2019 year-end on rising oil prices, with West Texas Intermediate closing above US$61 per barrel, supported by the Organization of the Petroleum Exporting Countries production cuts, improving inventory levels and expectations of an improving demand outlook on the back of the

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BMO Monthly High Income Fund II

announced U.S.-China trade deal. The price of gold also performed well in the second half of 2019 to finish above US$1,517 per ounce at year-end.

The U.S. Federal Reserve Board (“Fed”) cut rates another 25 basis points at the end of October 2019, bringing the total cuts to three during the Period. However, the Fed signaled a pause in further interest rate cuts as they move to the sidelines for the foreseeable future. The Bank of Canada kept rates steady during the Period and gave little indication that they appear ready to cut rates any time soon. Bond yields were volatile during the Period, but followed equity markets higher in the fourth quarter, with 10-year government of Canada yields rebounding to 1.7%. The widely watched 3-month/10-year segments of the U.S. treasury yield curve inverted a few times before re-steepening into the 2019 year-end.

The Fund had very strong absolute returns during the Period, but underperformed the S&P/TSX Composite High Dividend Index. The underperformance was primarily driven by the portfolio manager’s focus on high quality stocks and being more defensively positioned earlier in the Period. On the positive side, stock selection within the Energy sector added value, which was led by holding ARC Resources Ltd. and avoiding PrairieSky Royalty Ltd. and Crescent Point Energy Corp. The Fund’s underweight position in the Communication Services sector and overweight position in Cineplex Inc. were also positive.

On the negative side, the Industrials sector was the biggest source of underperformance, driven by weak performance from SNC-Lavalin Group Inc.; however, the company began to recover strongly into the year-end. Other individual detractors from performance were Toronto-Dominion Bank and Bank of Nova Scotia, Chemtrade Logistics Income Fund, Chartwell Retirement Residences and Northland Power Inc. In addition, holding cash in a very strong market detracted from returns.

During the Period, the portfolio manager initiated a new position in Suncor Energy Inc. and added to existing positions (ARC Resources Ltd. and Canadian Natural Resources Ltd.) based upon the manager’s continued positive outlook for oil prices and the Canadian Energy sector. All three companies are high quality names that can generate attractive levels of free cashflow, but also provide better downside protection in weaker oil price environment. Conversely, the portfolio manager sold Whitecap Resources on concerns that this smaller capitalization stock will have higher relative risk as it could be challenged to attract investor interest, despite being a well-run company.

Brookfield Infrastructure Partners L.P. and Emera Inc. were also added to the Fund during the Period. Brookfield Infrastructure Partners L.P. is a strong operator and an astute buyer/seller of critical infrastructure assets worldwide and should benefit from the secular growth of global infrastructure investments. Emera Inc. has a strong, stable, regulated rate base and should benefit from strong growth opportunities within its core Florida market. The portfolio manager sold the Fund’s position in Chemtrade Logistics Income Fund following disappointing operating performance and concerns about the company’s ability to deliver better performance should a weaker economic environment unfold.

The Fund distributes a fixed amount per unit each month, consistent with the Fund’s stated objective of providing a stable cash flow to its unitholders. A portion of a distribution may consist of a return of capital. This portion may be significant, and will occur when the income earned by the Fund per unit is less than the fixed amount of the distribution.

The Manager confirms that the Fund did not borrow money during the Period.

Recent Developments The outlook for the global economy has stabilized following the U.S. and China reaching a “phase one” trade deal. Although there were no significant tariff roll-backs in the deal, the fact that an agreement was reached has been well received by global markets. The portfolio manager expects a period of de-escalation between the two countries to prevail, but note that the trade war could re-escalate at some point as there are many areas of unfinished business. Unfortunately, the relief felt in global equity markets related to the U.S.-China trade deal has been short lived as the markets has shifted to the dramatic escalation of geopolitical tensions between the U.S. and Iran following the death of Qassem Soleimani, commander of the Islamic Revolutionary Guard Corps’elite Quds force in a U.S. strike near Baghdad. As a result of these competing tailwinds and headwinds, the range of potential outcomes for the economy and equity markets remain wide, driving elevated levels of volatility.

Within equities, following a period of increasing our defensive positioning in 2019, the portfolio manager has recently shifted the positioning to take advantage of the improving outlook following the U.S.-China trade deal. Having said that, their investment style provides natural downside protection and while further upside in equities is possible, the potential for higher volatility and exogenous risks remain.


Within Energy, the portfolio manager continues to have a positive outlook on oil prices and oil-focused Canadian Energy stocks, driven by attractive valuations and positive fundamentals, despite continued negative investor sentiment. Within Financials, they continued to reduce their bank exposure and remain comfortable with their underweight position. While valuations remain below long-term averages, the modest 2020 earnings growth expectations for the group will make it challenging for the banks to outperform.

Overall, the current environment for Canadian equities lines up well with the Fund’s portfolio of high quality dividend-paying and dividend growth stocks. The portfolio manager views Canadian stock valuations as relatively attractive, with the forward price-to-earnings multiple trading in-line with the long-term average, while U.S. stocks continue to trade well above the long-term average. They anticipate dividends will be a strong contributor to total returns going forward and will also provide good downside protection should equity markets get pulled down by macro events or a weakening economy.

On January 1, 2019, Marlene Davidge was appointed as Chair of the independent review committee (“IRC”). On April 4, 2019, the Fund’s IRC was decreased to four members when Louise Vaillancourt retired as an IRC member.

RELATED PARTY TRANSACTIONS

BMO Investments Inc., an indirect, wholly-owned subsidiary of Bank of Montreal (“BMO”), is the Manager of the Fund. From time to time, the Manager may, on behalf of the Fund, enter into transactions or arrangements with, or involving, other members of BMO Financial Group, or certain other persons or companies that are related or connected to the Manager (each a “Related Party”). The purpose of this section is to provide a brief description of any transaction involving the Fund and a Related Party.

Operating Expenses The Fund pays all of its operating expenses directly. These operating expenses include administration expenses and fund expenses. These operating expenses are allocated proportionately among the relevant series. Operating expenses that are specific to a series are allocated to that series. Operating expenses include expenses incurred in respect of preparing and distributing fund facts, interest or other borrowing expenses, all reasonable costs and expenses incurred in relation to compliance with National Instrument 81-107 Independent Review Committee for Investment Funds, including compensation and expenses payable to the Fund’s IRC members, taxes to which the

Fund is or might be subject, and costs associated with compliance with any new governmental or regulatory requirement introduced after December 1, 2007. The Manager may, at their discretion, absorb all or a portion of the operating expenses at any given time. Separate fees and expenses are negotiated and paid by each Series I investor. Further details about operating expenses can be found in the Fund’s most recent simplified prospectus at www.bmo.com/gam/ca and www.bmo.com/mutualfunds or www.sedar.com.

Buying and Selling Securities During the Period, the Fund relied on standing instructions provided by the IRC for any of the following related party transactions that may have occurred in the Fund:

(a) investments in securities of BMO, an affiliate of the Manager;

(b) investments in a class of non-government debt securities and/or equity securities of an issuer during the period of distribution of those securities to the public and/or the 60-day period following the distribution period where BMO Nesbitt Burns Inc., an affiliate of the Manager, or any other affiliate of the Manager acted as an underwriter in the distribution;

(c) trades in debt securities in the secondary market with BMO Nesbitt Burns Inc., or any other affiliate of the Manager, who is trading with the Fund as principal; and

(d) inter-fund trades

(each, a “Related Party Transaction”).

In accordance with the IRC’s standing instructions, in making a decision to cause the Fund to make a Related Party Transaction, the Manager and portfolio manager of the Fund, are required to comply with the Manager’s written policies and procedures governing the Related Party Transaction and report periodically to the IRC, describing each instance that the Manager relied on the standing instructions and its compliance or non-compliance with the governing policies and procedures. The governing policies and procedures are designed to ensure that each Related Party Transaction (i) is made free from any influence of BMO, BMO Nesbitt Burns Inc. or an associate or affiliate of BMO and/or BMO Nesbitt Burns Inc. and without taking into account any considerations relevant to BMO, BMO Nesbitt Burns Inc. or an associate or affiliate of BMO and/or BMO Nesbitt Burns Inc., (ii) represents the business judgment of the Manager, uninfluenced by considerations other than the best interests of the Fund, and (iii) achieves a fair and reasonable result for the Fund.

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Brokerage Commissions The Fund pays standard brokerage commissions at market rates to BMO Nesbitt Burns Inc., an affiliate of the Manager, for executing a portion of its trades. The brokerage commissions charged to the Fund (excluding exchange and other fees) during the periods indicated, were as follows:

Period endedDec. 31, 2019

Period endedDec. 31, 2018

Total brokerage commissions $ 425,960 441,462

Brokerage commissions paidto BMO Nesbitt Burns Inc. $ 55,933 68,722

Distribution Services The Manager markets and distributes the Fund through Bank of Montreal branches and/or (depending on the series) through registered dealers and brokers, including BMO InvestorLine Inc. and BMO Nesbitt Burns Inc., both affiliates of the Manager. The Manager may pay to these affiliates a service fee called a “trailing commission” based on the average daily value of the units and/or shares that are held in investor accounts. This service fee is paid monthly or quarterly and varies by purchase option and by series.

Management Fees The Manager is responsible for the day-to-day management of the business and operations of the Fund. The Manager monitors and evaluates the Fund’s performance, pays for the investment advice provided by the Fund’s portfolio manager and provides certain administrative services required by the Fund. As compensation for its services, the Manager is entitled to receive a management fee payable monthly, calculated based on the daily net asset value of each series of the Fund at the annual rate set out in the table below.

AnnualManagement

Fee Rate* %

As a Percentage of Management Fees

DealerCompensation

%

GeneralAdministration,

InvestmentAdvice and Profit

%

Series A Units 1.85 54 46 Advisor Series Units 1.85 48 52 Series T5 Units 1.85 49 51 Series T8 Units 1.85 49 51 Series F Units 0.60 0 100 Series D Units 1.00 26 74 Series I Units — — —

* For Series I Units, separate Series I fees are negotiated and paid by each Series I investor. Since the Manager pays no distribution, service or trailing fees on Series I Units, Series I Units will not exceed the management fee charged for Advisor Series or Series A Units.

FINANCIAL HIGHLIGHTS

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the periods indicated.

The Fund’s Net Assets per Unit (1)

Series A UnitsPeriods ended Dec. 31

2019 2018 2017 2016 2015

Net assets, beginning of period $ 11.64 14.15 14.36 12.64 14.75

Increase (decrease)

from operations:

Total revenue $ 0.52 0.55 0.54 0.52 0.56

Total expenses(2) $ -0.28 -0.28 -0.30 -0.30 -0.31

Realized gains (losses)

for the period $ 0.49 1.14 0.71 0.17 -0.07

Unrealized gains (losses)

for the period $ 1.41 -3.01 -0.46 2.03 -1.44

Total increase (decrease)

from operations(3) $ 2.14 -1.60 0.49 2.42 -1.26

Distributions:

From income

(excluding dividends) $ — — — — —

From dividends $ 0.21 0.21 0.19 0.16 0.15

From capital gains $ — 0.16 — — —

Return of capital $ 0.51 0.51 0.53 0.56 0.57

Total annual distributions(4) $ 0.72 0.88 0.72 0.72 0.72

Net assets, end of period $ 13.01 11.64 14.15 14.36 12.64

Advisor Series UnitsPeriods ended Dec. 31

2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.52 0.55 0.54 0.51 0.56

Total expenses(2) $ -0.27 -0.28 -0.30 -0.30 -0.31


for the period $ 0.49 1.13 0.71 0.17 -0.08


for the period $ 1.40 -3.01 -0.45 2.03 -1.51


from operations(3) $ 2.14 -1.61 0.50 2.41 -1.34

Distributions:

From income


From dividends $ 0.20 0.21 0.19 0.16 0.15






Series T5 Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.48 0.50 0.49 0.46 0.51

Total expenses(2) $ -0.25 -0.26 -0.27 -0.26 -0.28


for the period $ 0.46 1.05 0.64 0.16 -0.08


for the period $ 1.27 -2.78 -0.41 1.80 -1.35


from operations(3) $ 1.96 -1.49 0.45 2.16 -1.20

Distributions:

From income


From dividends $ 0.19 0.19 0.17 0.15 0.13






2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.28 0.30 0.30 0.29 0.33

Total expenses(2) $ -0.14 -0.15 -0.17 -0.17 -0.18


for the period $ 0.26 0.61 0.40 0.10 -0.05


for the period $ 0.73 -1.65 -0.25 1.17 -0.89


from operations(3) $ 1.13 -0.89 0.28 1.39 -0.79

Distributions:

From income


From dividends $ 0.11 0.11 0.11 0.09 0.09





Series F Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.66 0.69 0.67 0.63 0.68

Total expenses(2) $ -0.13 -0.13 -0.13 -0.13 -0.13


for the period $ 0.64 1.39 0.91 0.21 -0.11


for the period $ 1.68 -3.73 -0.56 2.44 -1.90


from operations(3) $ 2.85 -1.78 0.89 3.15 -1.46

Distributions:

From income


From dividends $ 0.52 0.52 0.50 0.47 0.51





Series D Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.39 0.37 0.37 0.35 0.37

Total expenses(2) $ -0.11 -0.11 -0.11 -0.12 -0.12


for the period $ 0.58 0.76 0.51 0.12 -0.06


for the period $ 0.98 -1.96 -0.33 1.31 -1.11


from operations(3) $ 1.84 -0.94 0.44 1.66 -0.92

Distributions:

From income


From dividends $ 0.21 0.24 0.22 0.20 0.21






Series I Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Increase (decrease)

from operations:

Total revenue $ 0.76 0.76 0.73 0.66 0.71

Total expenses(2) $ -0.01 -0.01 0.00 -0.01 -0.01


for the period $ 0.78 1.54 0.95 0.22 -0.04


for the period $ 1.76 -4.28 -0.60 2.72 -2.05


from operations(3) $ 3.29 -1.99 1.08 3.59 -1.39

Distributions:

From income

(excluding dividends) $ 0.05 0.04 0.08 0.07 0.08

From dividends $ 0.66 0.69 0.63 0.59 0.63





(1) The information is derived from the Fund’s audited financial statements. (2) Includes commissions and other portfolio transaction costs and withholding taxes. (3) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The

increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.

(4) Distributions were paid in cash or reinvested in additional units of the Fund, or both, where applicable.

Ratios and Supplemental Data Series A Units

Periods ended Dec. 31 2019 2018 2017 2016 2015

Total net asset value (000s)(1) $ 73,801 85,825 133,826 145,442 141,902

Number of units

outstanding (000s)(1) 5,673 7,375 9,458 10,132 11,224

Management expense ratio(2) % 2.14 2.12 2.12 2.13 2.13

Management expense ratio

before waivers or absorptions % 2.14 2.13 2.12 2.13 2.13

Trading expense ratio(3) % 0.04 0.04 0.03 0.05 0.04

Portfolio turnover rate(4) % 12.64 18.58 13.65 23.94 10.74

Net asset value per unit $ 13.01 11.64 14.15 14.36 12.64

Advisor Series Units Periods ended Dec. 31

2019 2018 2017 2016 2015

Total net asset value (000s)(1) $ 574,203 630,573 907,213 1,017,192 977,391

Number of units

outstanding (000s)(1) 44,211 54,283 64,239 70,984 77,436








2019 2018 2017 2016 2015


Number of units

outstanding (000s)(1) 671 808 1,254 1,431 1,429








2019 2018 2017 2016 2015


Number of units

outstanding (000s)(1) 4,155 4,599 5,114 5,396 5,620








Series F Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Number of units

outstanding (000s)(1) 12,651 13,186 13,398 10,205 7,454







Series D Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Number of units

outstanding (000s)(1) 3,455 492 597 392 298







Series I Units Periods ended Dec. 31

2019 2018 2017 2016 2015


Number of units

outstanding (000s)(1) 788 608 665 717 875

Management expense ratio+ % — — — — —


before waivers or absorptions+ % — — — — —




+ Operating expenses are paid by BMOII and management fees are paid directly to BMOII as negotiated with the investor.

(1) This information is provided as at December 31 of the period shown. (2) The management expense ratio of a particular series is calculated based on all expenses allocated to the

series, as applicable, including all taxes and interest expenses but excluding brokerage commissions and other portfolio transaction costs, divided by the average daily net asset value of that series, annualized.

(3) BMOII absorbed certain expenses or waived certain fees otherwise payable by a series. In doing so, BMOII attempts to maintain the overall MER of the Fund at a relatively consistent level. BMOII may discontinue the absorption or waiver at any time.

(3) The trading expense ratio represents the total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period.

(4) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio manager manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher a fund’s portfolio turnover rate in a year, the greater the trading costs payable by the fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a fund.

PAST PERFORMANCE

The Fund’s performance information assumes that all distributions made by the Fund in the periods shown were used to purchase additional units or shares of the Fund and is based on the net asset value of the Fund.

The performance information does not take into account sales, redemption, distribution or other optional charges that, if applicable, would have reduced returns or performance. Please remember, how the Fund has performed in the past does not indicate how it will perform in the future.

The returns of each series may differ from one another for a number of reasons, including if the series was not issued and outstanding for the entire reporting period and because of the different levels of fees and expenses allocated and payable by each series.

Year-by-Year Returns The following bar charts show the performance for each series of the Fund for each of the financial years shown. The charts show in percentage terms how an investment made on the first day of each financial year would have increased or decreased by the last day of the financial year.

Series A Units

50%

19.8025% 18.34 9.65

3.73

0% 3.73

-9.80 -11.97 -25%

-50% 2013(2) 2014 2015 2016 2017 2018 2019

Advisor Series Units

50%

20.73 19.7925% 18.3414.16

10.41 7.68 3.69 3.72

0%

-9.81 -11.98 -25%

-50% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Series T5 Units

19.82 18.36

3.74

-11.94

2016 2017 2018 2019

50%

20.3125% 14.15

0%

10.34 7.70 3.71

-9.80

-25%

-50% 2010(1) 2011 2012 2013 2014 2015

Series T8 Units

50%

20.81 19.82 25% 18.3914.1910.40 7.63 3.72 3.75

0%

-9.79 -11.95

-25%

-50% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Series F Units

50%

22.16 21.46 19.99 25% 15.5911.75 9.00 5.09 5.16

0%

-8.55 -10.75

-25%

-50% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Series D Units

50%

25% 20.87 19.48

4.67

0% -0.51

-9.02 -11.16

-25%

-50% 2014(3) 2015 2016 2017 2018 2019

Series I Units

5.94

50%

23.65 22.38 20.8925% 16.7313.03 10.24 5.99

0%

-7.86 -10.07

-25%

-50%2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(1) For the period beginning with the performance launch date of January 4, 2010 to December 31, 2010. (2) For the period beginning with the performance launch date of April 1, 2013 to December 31, 2013. (3) For the period beginning with the performance launch date of April 8, 2014 to December 31, 2014.

Annual Compound Returns This table compares the historical annual compound returnsof the Fund with its benchmark, the S&P/TSX Composite High Dividend Index, in addition to the S&P/TSX Composite Total Return Index (“S&P/TSX”), a broad-based index.

The S&P/TSX Composite High Dividend Index is a strategy index focused on dividend income. The S&P/TSX Composite High Dividend Index is made up of 50 to 75stocks from the S&P/TSX.

The S&P/TSX is a market capitalization-weighted index of securities of the largest and most liquid companies on theToronto Stock Exchange.

Series A Units 1

year 3

years 5

years 10 Since

years Inception(2)

BMO Monthly High Income Fund II % 18.34 2.61 3.15 4.29

S&P/TSX Composite High Dividend Index % 25.81 6.50 5.81 6.59

S&P/TSX % 22.88 6.89 6.28 7.59

Advisor Series Units 1

year 3

years 5

years 10 Since

years Inception



S&P/TSX % 22.88 6.89 6.28 6.90

Series T5 Units 1

year 3

years 5

years 10 Since

years Inception(1)



S&P/TSX % 22.88 6.89 6.28 6.90


Series T8 Units 1

year 3

years 5

years 10 Since

years Inception



S&P/TSX % 22.88 6.89 6.28 6.90

Series F Units 1

year 3

years 5

years 10 Since

years Inception



S&P/TSX % 22.88 6.89 6.28 6.90

Series D Units 1

year 3

years 5

years 10 Since

years Inception(3)



S&P/TSX % 22.88 6.89 6.28 6.29

Series I Units 1

year 3

years 5

years10 Since

years Inception



S&P/TSX % 22.88 6.89 6.28 6.90

(1) Return from the performance launch date of January 4, 2010 to December 31, 2019. (2) Return from the performance launch date of April 1, 2013 to December 31, 2019. (3) Return from the performance launch date of April 8, 2014 to December 31, 2019.

A commentary on the market and/or information regarding the relative performance of the Fund as compared to its benchmark can be found under the Results of Operations section of this report.


SUMMARY OF INVESTMENT PORTFOLIO

As at December 31, 2019

Portfolio Allocation % of Net

Asset Value

Energy 30.8

Financials 26.0

Utilities 13.1

Communication Services 9.9

Real Estate 9.7

Industrials 2.4

Health Care 2.2

Cash/Receivables/Payables 1.8

Money Market Investments 1.6

Materials 1.5

Consumer Staples 1.0

Total Portfolio Allocation 100.0

Top 25 HoldingsIssuer

% of Net Asset Value

Bank of Nova Scotia, The 5.7

Canadian Natural Resources Limited 5.1

TC Energy Corporation 4.9

Enbridge Inc. 4.9

Pembina Pipeline Corporation 4.8

Toronto-Dominion Bank, The 4.3

Manulife Financial Corporation 4.0

Royal Bank of Canada 4.0

Fortis Inc. 3.9

TELUS Corporation 3.8

Intact Financial Corporation 3.1

Keyera Corp. 2.9

Canadian Imperial Bank of Commerce 2.8

ARC Resources Ltd. 2.5

Northland Power Inc. 2.5

RioCan REIT 2.3

AltaGas Ltd. 2.3

Suncor Energy Inc. 2.2

Shaw Communications Inc., Class B 2.2

Rogers Communications Inc., Class B 2.2

Chartwell Retirement Residences 2.2

Brookfield Infrastructure Partners L.P. 2.2

Power Corporation of Canada 2.1

Allied Properties REIT 2.1

Canadian Apartment Properties REIT 2.0

Top Holdings as a Percentage of Total Net Asset Value 81.0

Total Net Asset Value $937,788,570

The summary of investment portfolio may change due to the Fund’s ongoing portfolio transactions. Updates are available quarterly.

BMO Investments Inc. First Canadian Place, 43rd Floor 100 King Street West Toronto, Ontario M5X 1A1

www.bmo.com/mutualfunds and www.bmo.com/gam/ca

If you have any questions, please give us a call as follows:

• If you purchased BMO Mutual Funds through a BMO Bank of Montreal branch or BMO Online Banking, please call 1-800-665-7700.

• If you purchased BMO Mutual Funds through a full-service or discount broker, please call 1-800-668-7327 or email [email protected].

This document may contain forward-looking statements relating to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent our beliefs regarding future events. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed or implied in the forward-looking statements. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including but not limited to market and general economic conditions, interest rates, regulatory and statutory developments, the effects of competition in the geographic and business areas in which the Fund may invest in and the risks detailed from time to time in BMO Mutual Funds’ simplified prospectus. We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to investing in the Fund, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Due to the potential impact of these factors, BMO Investments Inc. does not undertake, and specifically disclaims, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

®/™ Registered trade-marks/trade-mark of Bank of Montreal, used under licence. BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal.

mailto:[email protected]

www.bmo.com/gam/ca


Date post:	30-Sep-2020
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