BMO Mutual Fund Report March 2007. As of January 31, 2007, the Canadian mutual funds industry was worth $673.4 billion in terms of dollar assets under administration, of which long-term mutual fund assets accounted for $627 billion.

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BMO Investments Inc.

Mutual Fund Report

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Prepared by:

Date:  March 5, 2007



        Profile of Industry        3


        Company Profile        5

        Evaluation of Selling and Marketing Strategy        5


        Fund Highlights        13

        Top Performing Funds        16




Fig. 1        7

Fig. 2        13

Fig. 3        15

Fig. 4        16

BMO Investments Inc.

Mutual Fund Report



As of January 31, 2007, the Canadian mutual funds industry was worth $673.4 billion in terms of dollar assets under administration, of which long-term mutual fund assets accounted for $627 billion.  The month of January saw industry growth of 1.9%, to which long-term fund net sales contributed $4.1 billion.  

Currently, investors can choose from more than nineteen hundred mutual funds operating within Canada.  These have been divided into thirty six different categories (such as global equity funds, high yield bond funds, alternative strategies funds, etc.) by the Canadian Investment Funds Standards Committee.  Also, the Investment Funds Institute of Canada has, for the first time, reported the overall activity for mutual funds by classifying them into two groups:  stand-alone mutual funds and mutual funds of funds.  Stand alone mutual funds account for the majority of funds in existence, with $578.2 billion in assets and $1.6 billion in 2007 net sales as of January, while funds of funds represent $95.1 billion in assets and $2.4 billion in net sales.

The financial services sector in Canada, in particular the mutual funds industry, is very competitive.  Funds are offered by most of the country’s 6 largest banks and 13 smaller domestic banks, along with over 60 mutual fund companies, 180 investment dealers, 29 trust companies and 1300 credit unions.  In fact, according to Statistics Canada’s 2005 National Balance Sheet Accounts, Canadian household financial assets (which include mutual funds) are managed by a variety of financial institutions, e.g. 20 percent are managed by banks, 69 percent are held by services providers such as pension and mutual funds, etc.  Some of the reasons behind this increasing competitiveness are the disappearance of old taboos regarding institutions competing in each other’s immediate industries (e.g. banks now own investment dealers and mutual fund companies), federal law and regulation changes over the past few years that have allowed for more foreign banks to operate in Canada and for new banks to start up, and technological advancements that have led to new ways of offering products and services (such as with iShares ETFs).



BMO Mutual Funds® are distributed by BMO Investment Inc., the head offices for which are located at 77 King Street West, Suite 4200, Royal Trust Tower in Toronto.  It is indirectly owned wholly by BMO Financial Group, which was originally established as Bank of Montreal in 1817, making it Canada’s very first bank

BMO Financial Group is comprised of three separate operating groups:  Personal and Commercial Banking, Investment Banking Group and Private Client Group (under which BMO Investments Inc. operates).  This group earned $360 million by the end of October, 2006, the company’s 4th fiscal quarter.  This performance was up by $40 million or 13 percent from a year ago.

The PCG provides clients access to over 950 mutual funds. These include the well diversified family of over 47 different BMO Mutual Funds® offered by BMO Investments Inc., whose assets under management are $22.88 billion. 


How the funds are sold

BMO Mutual Funds® ensures that its funds are offered in a way that minimizes the complexities and complications regarding investing.  The funds are classified into the following four categories according to overall objectives and degree of risk:

  • Security funds, which cater to conservative investors and hold the safest investments;
  • Income funds, which are meant to provide regular income with the minimal risk;
  • Growth funds, which bear higher risk but are designed to offer higher potential returns;
  • and Aggressive Growth funds, which are best suited to experienced investors who are comfortable with higher short-term risk and price fluctuations in order to achieve returns that are well above average.

BMO Mutual Funds® are diverse enough to suit every investment objective and offer clients the flexibility to switch to another BMO Mutual Fund at no charge, should their needs or objectives change.  The funds are of the “no load” kind in that clients are not charged any commission / sales fees (whether initial or deferred) or transfer fees when they buy, sell or switch within the BMO family of funds,

The funds are an affordable option for investors, as investment can be made in a single mutual fund for as little as $500.  The fund offers further affordability by letting clients participate in the Continuous Savings Plan, which requires as little as monthly contributions of just $50 dollars, instead.  Depending on the plan, clients have the freedom to choose the frequency and amount of contributions and can even temporarily stop payments in between.  Most of the funds are RRSP eligible.

In order to inhibit excessive trading that could be detrimental to the value of the fund and other investors’ holdings, a fund may charge a short term trading penalty of up to 2 percent of the amount that is redeemed or switched between funds if such actions are undertaken within 30 days of the original redemption or switch.

The funds can be purchased, redeemed and transferred online by opening a BMO Mutual Funds® account through any Bank of Montreal branch or by calling or faxing the BMO Investment Centre, and then registering for online access.  They can also be purchased over the phone by calling the BMO Investment Centre or in person by visiting any Bank of Montreal branch.  BMO Nesbitt Burns clients can purchase these funds through their advisor and BMO InvestorLine Direct Investing clients can do so through their accounts either online or via phone.

Service support offered

BMO Mutual Funds® offer four different service support features along with the investment products.  

  • Aside from availing personal financial advisory services, investors are encouraged to fill out the BMO Investor Profiler, which gives them a better idea of the type of investor they are.  
  • BMO Matchmaker® is another time saving service that matches an investor’s goals and profile to come up with the right diversified mix of mutual funds.
  • Continuous Savings Plan lets clients invest in the funds by making monthly payments as little as $50.
  • BMO Online Access allows clients to access their BMO Mutual Funds® from the internet.  

Figure 1 is a table highlighting some key features and benefits of the service support features offered by BMO Mutual Funds®.

Figure 1

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The website


The website for BMO Mutual Funds® is .  It is divided into five main sections:  Funds, Products & Services, Education Centre, News & Research and Customer Service.  

The Funds section:

  • talks about why investors should buy BMO funds in “About Our Funds”,
  • explains the various ways the funds can be purchased in “How to Buy Funds”,
  • details all the available funds (e.g. BMO T-Bill Fund, BMO Bond Fund, etc.) by classifying them according to their classes (e.g. Security Funds, Income Funds, etc.) under “Our Fund Family”
  • ...

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