Best Bank in Canada

BMO Mutual Funds in Canada

BMO has the undisputed honours of being Canada’s s first bank since it began operations in 1817. The bank is arguably one of Canada’s best banks, offering 100+ mutual funds, ETFs, including other lucrative and investable assets. Read on to learn about BMO Mutual funds and how you could make money investing with BMO.

How do BMO Mutual Funds Work?

BMO Mutual funds work similarly to other mutual funds, and this means that it is a pooled investment package. BMO trades its mutual funds on the stock exchange, allowing investors to buy and sell to make a profit.

As the fund advisor-cum-manager, BMO takes the money from various investors to create an investment portfolio, purchasing stocks, bonds, and other securities.

These funds are of many varieties, each with its own investment goals. A mutual fund’s objective might be capital gains, dividends, or interest, depending on the fund.

Other funds are made up of investments that seek to monitor a stock index, while others comprise hedged funds and futures, including derivatives and other high-risk investments.

Investors may choose to actively or passively manage their mutual funds. Actively managed mutual funds involve the manager, in this case, BMO, to buy and sell the investable assets in the portfolio to achieve the fund’s objectives.

The passively managed mutual fund often tracks a stock market index to provide similar returns. They both follow different approaches to meet the investment goals, and the significant difference lies with the fund manager’s strategy.

Both funds accrue charges, which include fees and commissions that may reduce your investment returns. The costs attached to the mutual funds vary, with some commanding lesser charges and others higher. That said, mutual funds, particularly index funds, are typically affordable, but it’s still wise to read the fund facts before investing.

Popular BMO Mutual Funds

Mutual funds such as BMO’s funds are categorized as Balanced, Equity, Global, Money Market, Bond/Income and others like emerging markets and sector-specific funds. Each fund is unique in that it has distinct levels of risk/reward.

The fees attached to these portfolios vary from fund to fund. In plain terms, the higher the risk, the better the return on investment. The mutual fund manager will take the time to answer your investment questions before recommending a mutual fund that suits your investment style. Below are some popular BMO Mutual funds.

 BMO Money Market Fund

The BMO money market fund focuses on preserving capital and shoring up liquidity and interest income. Investors need to place a minimum investment of C$500 and additional contributions of C$50 for further investments.

Highlights

  • AUM: C$637.2 million
  • MER: 1.15%
  • Three-year return: 0.53%
  • Five-year return: 0.56%

BMO Bond Fund

The BMO Bond Fund is a mutual fund with interests in Treasury Bills, government and corporate bonds with a maturation of one year or less.

The mutual fund aims to provide investors with capital appreciation and interest income. As a low-risk fund, the buy-in stake starts at C$500 and an extra C$25 in further investments.

Highlights

  • AUM: C$369.2 million
  • MER: 1.6%
  • Three-year return: 2.91%
  • Five-year return: 2.24%

BMO Asset Allocation Fund

The Assets Allocation Fund consists of income and equity investments. BMO purchases underlying stocks anchored on an investment strategy that tracks and analyzes interest rate trends. The funds are a low-medium risk with an initial investment of C$500 and further contributions of C$25.

Highlights

  • AUM: C$1579.2 million
  • MER: 2.12%
  • Three-year return: 2.09%
  • Five-year return: 2.85%

BMO U.S Equity Fund Series F-Hedged

A feature that unites all equity funds is achieving long-term capital growth by investing in top-tier equity securities with growth potential.

The BMO US Equity Fund Series F-Hedged allows investors to buy shares in FAANG companies like Facebook, Amazon, Apple, Netflix, and Google, including Merck, Proctor, and Gamble, and Microsoft.

The entry-level buy-in start at C$500 and C$50 for additional contributions. As a hedged fund, BMO limits the volatility of the portfolio by investing in products like futures.

Highlights

  • AUM: C$1182.46 million
  • MER: .83%
  • Three-year return: 3.9%
  • Five-year return: n/a

BMO Emerging Markets Fund

This fund is managed by LG Investments Inc, a BMO subsidiary, and they enable investors to place their monies in foreign companies in South Asia like Taiwan, Malaysia, and China.

These companies dominate their respective industries, which include consumer staples, energy, and the financial sector. The entry-level investment is C$500 and an extra C$50 in additional contributions.

The BMO Emerging Markets Fund is considered a medium to high-risk fund.

Highlights

  • AUM: C$633.01
  • MER: 1.13%
  • Three-year return: n/a
  • Five-year return: n/a

BMO Mutual Funds that Pay Dividend

BMO also has a collection of dividend-paying funds with less volatility than a global or equity fund but can provide better returns than a bond or money market fund.

Investors who opt for these funds may choose to reinvest their dividends to buy additional units.

BMO Global Dividend Fund

This mutual fund invests in established multinational companies across the United States, Germany, Canada, and Ireland. Some of its premium holdings include Nestle, Costco, Apple, and Microsoft.

The fund is considered medium risk and has an initial investment of C$500 and a further C$50 in subsequent contributions. Guardian Capital LP Ltd manages the BMO Global Dividend Fund to increase the fund value through dividend income and capital gains. 

Highlights

  • AUM: C$240.5 million
  • MER: 2.45%
  • Three-year return: 3.50%
  • Five-year return: 4.44%

BMO Dividend Fund

The BMO Dividend Fund is considered a low-medium risk and aims to invest in top-tier Canadian companies in the finance, energy, and transport sector. It is one of the longest-running funds, having been in existence since 1994.

Highlights

  • AUM: C$5.41 billion
  • MER: 1.8%
  • Three-year return: 2.55%
  • Five-year return: 3.66%

BMO North American Dividend Fund

Although not as well-known as the BMO Dividend Fund, the North American Dividend Fund was also established in 1994.

The dividend-paying fund has a penchant for investing in North American financial institutes spread across Canada and the United States.

It has interests in companies in the IT, utilities,  healthcare, and consumer staples industry. The minimum buy-in is C$500 and an additional C$50 in extra contributions.

Highlights

  • AUM: C$399.3 million
  • MER: 2.53%
  • Three-year return: 0.91%
  • Five-year return: 3.17%

How to Invest in BMO Mutual Funds

1. Consult a Mutual Fund Advisor

It is compulsory to purchase BMO Mutual funds with the help of an authorized mutual fund professional. BMO Mutual funds are transacted through a mutual fund manager who can sell these funds in your location.

Not everyone in a  BMO bank branch can sell mutual funds, and BMO employees who do so may only deal in BMO’s repertoire of mutual funds.

For further information on mutual fund licensing, check the Canadian Securities Administrators to determine if your fund manager is licensed to sell funds in Canada.

2. Map out your Investment Goals

The BMO Mutual fund manager is obliged to take your questions and walk you through any concerns you might have concerning the mutual fund.

Your fund manager may recommend individual funds or a collection of funds tailored to achieve investment goals. The portfolio proffered to you will depend on your risk tolerance and investment objectives.

It is essential to understand everything about the BMO mutual funds fund facts before investing your money.

3. Invest Your Money

Investors may either set up monthly payments via their bank account or make a single large contribution.

Most funds, including BMO mutual funds, have a baseline amount before you can partake in the fund. You may also track your fund performance online and receive statements quarterly, semi-annually, or yearly.

Investors also have the option of signing up for a self-directed investment account to create their portfolio. This feature puts the investor in full control of the trade requests processed by BMO.

A further option is Investorline, which provides investment advice for a yearly fee of C$750 for investments up to C$100,000. Any investment above C$100,000 will cost 75%, and the investor has to maintain a minimum balance of C$50,000.

Ensure to read through the fund facts to ascertain eligibility. Investors with a minimum of C$1000 may use a Smartfolio account to manage their investment at 0.7% per annum up to C$100,000.

4. Stay Focused

Mutual funds are generally low-risk, but it is still easy to lose money. Your portfolio’s value is subject to the direction of the stock market, and sometimes it may seem like keeping your money in a piggy bank is a better option. That’s why intelligent investors think long-term.

Nonetheless, if you are worried about your fund direction, consult your mutual fund manager. You may decide to opt for another fund like the TD Mutual funds or liquidate your units and withdraw your money.

If you prefer the latter, withdrawing your cash might take up to  48-72 hours to process. You may spend less time if you own a money market fund that works like a cash account.

FAQs

Who distributes BMO Mutual Funds?

BMO Mutual funds are distributed and managed by BMO Investments Inc, a find manager with a distinct identity from the Bank of Montreal.

What is the Best Mutual Fund in Canada?

Canada has hundreds of mutual funds offered to investors, and the best fund depends on your investment objectives, philosophy as well as risk tolerance.

Can You lose all your money in a mutual fund?

All investments come with risk, and this is also true for mutual funds. It is possible to lose all your money in a mutual fund with poor advice, and that is why it is necessary to consult your fund manager before taking any action. 

*The information provided in this article does not constitute financial advice, and past fund performance is not an indicator of present or future investment returns. The information on this page is subject to change, and it is in your best interest to check out the current BMO fund pages for the latest news.

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