News Releases

Guardian Group of Funds Ltd. (GGOF) today announced the launch of Bank of Montreal GGOF C.O.R.E. Protected Deposit Notes High Yield Bond R.O.C. Class, Series 3 and 4, based on the performance of GGOF High Yield Bond Fund.

Investors in the Deposit Notes will obtain 100 per cent exposure to the potential distributions and capital appreciation of GGOF High Yield Bond Fund, managed by Steve Kearns of Guardian Capital LP (GCLP). Mr. Kearns has managed GGOF High Yield Bond Fund, the second largest active Canadian high yield bond fund, since its inception in January 1999.

These new Deposit Notes offer investors the opportunity to participate in the returns of this Fund while 100 per cent of their principal is protected if held to maturity by Bank of Montreal as issuer. The Deposit Notes make potential monthly distributions in the form of Return of Capital (R.O.C.), a more tax-efficient form of distribution than interest income. Seventy-five per cent of the distribution rate of GGOF High Yield Bond Fund will take this form, with the remaining 25 per cent of the distributions notionally invested in the Fund for growth. Series 3 of the Deposit Notes will be available until May 11, 2007 and series 4 will be available until June 29, 2007.

Why invest in high yield bonds?
High yield bonds are unique because they combine some of the best features of both income and equity products. They have a lower correlation to interest rates than investment grade bonds and can therefore provide valuable portfolio diversification. High yield bonds also have greater potential for price appreciation than investment grade bonds, which provide them with the potential to generate positive returns in most market environments.

"Carefully selected high yield bonds can also benefit from upgrades by credit ratings agencies as their financial position improves, adding to the possibility of positive returns unrelated to interest rates movements,” said Gavin Graham, Chief Investment Officer, GGOF. "Steve Kearns has demonstrated an excellent track record in managing the fund's credit exposure since its inception in 1999."

Benefits of Return on Capital (R.O.C.)
Fixed income funds normally distribute interest income, however, distributions are more tax-efficient when made as R.O.C. because they don't need to be taken into income in the year received. This allows investors to not only defer taxation, but also to determine the timing of their tax liability since tax is paid when the note matures or is sold.

GGOF provides investors with a full product line of 34 mutual funds, diversified by asset class, geographic region and capitalization. GGOF, with $6.1 billion of mutual fund assets under management at February 28, 2007, offers its funds exclusively through financial intermediaries.

GGOF is a member of BMO Financial Group and part of the organization's Private Client Group. BMO's 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 $296.5 billion as at January 31, 2007.

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