ETF investing made easy

[Pages:4]ETF investing made easy

BMO Tactical ETF Classes and BMO ETF Portfolios

BMO ETF Class Mutual Funds

The Strength of Mutual Funds and the Simplicity of ETFs

Exchange Traded Funds (ETFs)

Exchange Traded Funds, or ETFs, are changing how Canadians invest. By 2016 it's anticipated that the ETF market will have grown by more than three times the amount at the end of 2009. ETF growth is predicted because they provide investors with broad market, asset class and sector diversification that's easy to use, efficient and cost effective.

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120

100

$105

billion

80

60

40

20

$32

billion

0 Dec 2009 2010

2011

2012

2013

2014

2015

2016

Source: Blackrock Inc., Investor Economics Inc., TMX Group Inc (as of December 31, 2009)

However, the rapid growth in the use of ETFs is causing many investors to wonder if they should also be considering ETFs, and if so, how should they be used?

How to Use ETFs?

Traditionally, ETFs have been used by investors and financial professionals looking for low cost and effective exposure to the performance of broad asset classes or indexes. This has typically meant that ETFs focused on a specific asset class (i.e. Junior Gold companies) or Index (i.e. Dow Jones

Industrial Index) and it was up to the investor to determine how to best use the ETF within their portfolio.

Mutual Funds that invest in ETFs

Now, investors have more choices for ETF investing. The innovation of mutual funds that invest in ETFs as the underlying securities allows investors to combine the benefits of individual ETFs with the power of corporate class mutual funds. When these benefits work together in an ETF-based fund, the whole truly becomes greater than the sum of its parts.

Key Benefits

Transparency Potential tax advantage Cost effectiveness Professional management Portfolio diversification Automatic rebalancing

Mutual Fund of ETFs

ETFs & Asset Allocation

Investing ETFs within a mutual fund goes one step further by allowing managers to easily employ investment strategies for different types of investors. Typically, two main models are used; tactical and strategic asset allocation. Tactical models work in the short term by actively adapting to changes within the market as they happen, while strategic models follow a longer-term allocation that's regularly rebalanced to maintain a specific target return for a specific amount of risk.

Tactical vs. Strategic Asset Allocation

Investment time horizon

Tactical Allocation Strategic Allocation

Short-mid term

Long-Term

Allocation Model Driver

Market events

Risk/return optimization

Active ? manager Changes to allocation model

decision

Passive ? only if model changes

BMO ETF Classes and Portfolios

BMO Mutual Funds is proud to offer investors 6 professionally managed and cost-effective mutual funds that invest in ETFs: BMO Tactical ETF Classes and BMO ETF Portfolios.

BMO Tactical ETF Classes

? BMO Canadian Tactical ETF Class - Tactically managed exposure to Canadian

equity and fixed income markets - Managed by BMO Asset Management Inc. using

an allocation model with over two decades of successful results

? BMO Global Tactical ETF Class - T actically managed exposure to global equity

and fixed income markets - M anaged by Pyrford International Ltd.,

a global wealth management firm with over 20 years experience

? Corporate class structure for tax-deferred growth and investment flexibility

BMO ETF Portfolios

? 4 risk differentiated, strategically managed portfolios ? Security, Balanced, Growth & Aggressive Growth

? Easy to use, all-in-one managed solutions

? Corporate class structure for tax-deferred growth and investment flexibility

The strength of BMO Financial Group

BMO Financial Group is committed to offering investors the right products and service they need to reach their financial goals. An excellent example of this commitment is BMO Mutual Funds' new ETF- based mutual fund portfolios. BMO Mutual Funds ETF portfolios and their underlying BMO ETFs are manufactured, managed and serviced within BMO Financial Group. Investing primarily in ETFs, a cost effective investment option, allows BMO Mutual Funds to offer these funds at a lower cost than the average mutual fund in the same category. It's also important to note that there is no duplication of management fees between the top fund and its underlying ETFs. The only management fee paid by each BMO Mutual Funds ETF Class or Portfolio is the management fee applicable to that fund (Class or Portfolio).

Visit mutualfunds for more information on investing or:

? drop by your local BMO Bank of Montreal branch and speak to an investment professional

? call BMO Bank of Montreal Direct Banking at 1 888 771-0123 or BMO Investment Centre at 1 800 665-7700

(07/10-545)

? Registered trade-marks of Bank of Montreal, used under licence.

BMO ETF Class Portfolios are series classes of BMO Global Tax Advantage Funds Inc., offered by BMO Investments Inc., a financial services firm and separate entity from Bank of Montreal. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing and for details on how these funds are structured to allow switches without realization of capital gains. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

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