News Releases

BMO Mutual Funds Launches New Funds to Address Growing Importance of Income For Baby Boomers

In response to the growing demand for income in retirement, BMO Mutual Funds today launched BMO Income Trust Fund and BMO Diversified Income Fund. The new funds will provide investors with tax efficient monthly cash distributions.

“Given that one in two Canadian boomers can expect to live into their nineties, it's not surprising that they are now re-evaluating not only how they are going to occupy this time, but how they're going to pay for it,” said Ed Legzdins, President and CEO, BMO Investments Inc.

According to the BMO Retirement Trends Study*, the most comprehensive survey on Canadian retirement compiled to date, more than half (54 per cent) of Canadian financial decision-makers 45 years of age and older think they know how much money they'll need in retirement. Of these respondents, 66 per cent consider their retirement income needs from a monthly perspective, not as an annual figure or lump sum dollar amount as commonly used in the financial planning industry.

“Approaching the new realities of retirement from the conventional lump sum funding perspective is no longer viable,” said Legzdins. “It doesn't sufficiently take into account our time horizon or the host of contingencies, such as the cost of health care, that a 25 to 30 year retirement plan needs to consider. As a result, the shift from asset accumulation to income management is well underway.”

BMO Mutual Funds' new income funds provide more choice to the boomer investor who is seeking a consistent stream of income each month from their non-registered investments.

BMO Income Trust Fund

Focused on providing investors with a tax efficient monthly cash distribution, currently fixed at $0.06 per unit/per month, BMO Income Trust Fund will invest in Canadian income trust securities, such as Royalty Trust Units (RTUs), Real Estate Investment Trusts (REITs) and Business Trusts (BTs) from various sectors. BMO Income Trust Fund will be managed by Guardian Capital and its pioneering team of John Priestman, Michelle Robitaille and Kevin Hall. Guardian Capital introduced Canada's first monthly pay trust unit fund in 1996.

BMO Diversified Income Fund

BMO Diversified Income Fund will invest primarily in Canadian and foreign fixed-income and equity securities, income trust securities and global high yield bonds, either directly or through mutual fund securities. Investors will receive tax-efficient income with a distribution currently fixed at $0.06 per unit/per month. The lead portfolio manager for the BMO Diversified Income Fund will be Jones Heward Investment Counsel, with UBS Global Asset Management, PIMCO and Guardian Capital managing specific asset classes within the fund.

These two new funds, along with BMO Mutual Funds' other fixed monthly distribution funds - BMO Monthly Income Fund, BMO Global Monthly Income Fund, BMO Global High Yield Bond Fund and BMO U.S. Dollar Monthly Income Fund - offer investors a complete range of income-oriented investments that provide a consistent monthly cash flow.

BMO Investments Inc. is a member of BMO Financial Group and part of the organization's Private Client Group. The Private Client Group provides integrated wealth management services in Canada and the United States and had total assets under management and administration and term investments of $272.8 billion as at April 30, 2006.

*The BMO Retirement Trends Study was conducted for BMO Financial Group by Ipsos Reid. It canvassed 5,325 Canadian financial decision-makers 45 and over.

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