An anonymous director reports
BMO INVESTMENTS INC. ANNOUNCES PROPOSED FUND MERGERS AND MANAGEMENT FEE REDUCTIONS
Bank of Montreal's BMO Investments Inc., the manager of the BMO mutual funds, has proposed to merge certain BMO mutual funds to streamline its product suite as well as management-fee reductions for certain series of the continuing funds (as defined herein) to facilitate these mergers.
Subject to obtaining all necessary securityholder and regulatory approvals, BMO Investments proposes that each mutual fund be merged into the corresponding mutual fund as set out in the terminating funds table included herein. If approved, the mergers will be effective on or about June 25, 2021.
Terminating funds Continuing funds
BMO Floating Rate Income Fund BMO U.S. High Yield Bond Fund
BMO Monthly Dividend Fund Ltd. BMO Dividend Fund
Approval from securityholders of the terminating funds will be sought at special meetings to be held on June 18, 2021. BMO Monthly Dividend Fund Ltd. will also be holding its annual general meeting on June 18, 2021. If the merger of BMO Floating Rate Income Fund into BMO U.S. High Yield Bond Fund is not approved, securityholders of BMO Floating Rate Income Fund will also be asked to consider the termination of the fund at the special meeting of securityholders of BMO Floating Rate Income Fund to be held on June 18, 2021.
In advance of the meetings, a notice-and-access document will be sent on May 17, 2021, to securityholders of record as at May 7, 2021. The notice-and-access document will describe the various ways in which securityholders can obtain a copy of a management information circular that contains full details of the proposed mergers. The notice-and-access document and management information circular will also be available on SEDAR.
The merger of BMO Floating Rate Income Fund into BMO U.S. High Yield Bond Fund will be effected on a taxable basis for securityholders. The merger of BMO Monthly Dividend Fund Ltd. into BMO Dividend Fund will be effected on a tax-deferred basis for securityholders.
If the proposed mergers are approved, each merger will be implemented by exchanging securities of each series of each terminating fund for securities of the same series of the applicable continuing fund in the same currency, having a net asset value on the effective date equal to the net asset value of the securities tendered. Since the merger of BMO Floating Rate Income Fund into BMO U.S. High Yield Bond Fund will be implemented on a taxable basis, if investors purchase securities of BMO Floating Rate Income Fund before the effective date, they may realize income and a capital gain or a loss on this merger. Each terminating fund will be wound up as soon as reasonably possible following its merger.
The independent review committee of the terminating funds and the continuing funds has reviewed the potential conflict of interest matters related to the proposed mergers and has provided BMO Investments with a positive recommendation for the mergers after determining that each merger, if implemented, would achieve a fair and reasonable result for the terminating funds and their corresponding continuing funds.
Purchases of, and switches into, securities of each terminating fund will be suspended at the close of business on the third business day prior to the effective date, except for purchases made pursuant to pre-established continuous savings plans, which will be suspended as of the close of business on the fifth business day immediately preceding the effective date.
Securityholders of a terminating fund will have the right to redeem securities of, or make switches out of, the terminating fund up to the close of business on the business day immediately before the effective date.
Management fee reductions
The management fee applicable to Series A and adviser series securities of BMO U.S. High Yield Bond Fund, and Series D securities of BMO Dividend Fund will be reduced, effective June 24, 2021, to facilitate the mergers.
Current annual Annual management fee
management fee effective June 24, 2021
Series of securities
of BMO U.S. High Yield Bond Fund
Series A 1.60% 1.20%
Adviser series 1.60% 1.20%
Series of securities
of BMO Dividend Fund
Series D 0.90% 0.85%
BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Ltd. and BMO's specialized investment management firms.
BMO Mutual Funds are managed by BMO Investments, which is an investment fund manager and a separate legal entity from Bank of Montreal.
About Bank of Montreal
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider -- the eighth-largest bank, by assets, in North America. With total assets of $973-billion as of Jan. 31, 2021, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: personal and commercial banking, BMO Wealth Management and BMO Capital Markets.
© 2021 Canjex Publishing Ltd. All rights reserved.