Strategic Yield Funds
The missing piece between equities and fixed income
Introducing our new Convergence investing suite—a unique offering that replicates an exposure of structured notes to complement your traditional balanced portfolio.
Reach for yield. Not risk.
That age-old problem – you need higher income to fulfill your investment goals, yet are sensitive to market volatility. Our solution: Convergence investing.
* BMO Strategic Equity Yield Fund Performance (F Series): 0.62% (3mo), 3.22% (6mo), 3.36% (1yr), 2.75% (Since Inception, June 16, 2023). Source: Morningstar, as of June 30, 2024.
Convergence investing, explained.
Convergence investing aims to democratize access to capital markets solutions. Our mission is to provide investors with sophisticated, defined-outcome investment tools in the format of a traditional mutual fund.
Our core offering, the BMO Strategic Equity Yield Fund, brings the power of structured notes through replication in a managed solution.†
† The BMO Strategic Equity Yield Fund will focus on replicating exposure to notes focused on income generation, while also maintaining contingent downside protection. Our dedicated team of structured product professionals seeks to achieve above market returns and exposure to North American and/or global equity markets through the use of derivatives and/or structured products.
What are structured notes?
Structured notes are hybrid investments engineered to achieve a specific investment outcome. With the BMO Strategic Equity Yield Fund, the goal is to replicate an exposure that blends the properties of equities and fixed income. To land somewhere in the middle, offering higher potential returns than a standard bond fund with a risk rating* lower than the usual basket of stocks.
Right in the sweet spot.
Fund investment strategy
Broadly speaking, structured notes fall on a spectrum between income and growth. The BMO Strategic Equity Yield Fund aims to replicate exposure to notes focused on income generation, while also maintaining contingent downside protection. Our dedicated team of structured product professionals seeks to achieve above market returns and exposure to North American and/or global equity markets through the use of derivatives and/or structured products.
The secret sauce: auto-callable notes.
Canada’s wealthiest investors have used structured notes for decades1. Now you can, too.
The process of managing a portfolio of structured notes can be expensive and time-consuming. Hundreds of hours may be spent analyzing strike prices, yields, risk barriers and buffers. The BMO Strategic Equity Yield Fund makes it simple and stress-free to replicate that exposure, putting a whole new asset class within your reach.
BMO Strategic Fixed Income Yield Fund
BMO Strategic Fixed Income Yield Fund seeks to replicate the outcome of an actively managed portfolio of diversified structured interest rate notes to generate higher yield without the added credit risk.
Structured interest rate notes are a type of structured product that are designed to provide a customized cash flow stream that can adjust with market conditions, offering stability and the opportunity for enhanced yield compared to traditional fixed income investments.
Reference exposure: Secured Overnight Financing Rate (SOFR)
Categorized as Fixed Income
BMO GAM is the first Canadian asset manager with a dedicated structured products team.
We have established the first in-house division for Convergence investing in Canada. Our team is composed of highly tenured experts with a combined 100+ years of experience in capital markets. Led by BMO Global Asset Management CEO Bill Bamber and Head of Synthetic Asset Management, Sara Petrcich, the specialized group will continue to build defined-outcome investment products that enhance traditional asset allocation.
Resources
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If you are an advisor, please contact your BMO wholesaler.
Strategic yield FAQs
Disclosures
* BMO Strategic Equity Yield Fund Performance (F Series): 0.62% (3mo), 3.22% (6mo), 3.36% (1yr), 2.75% (Since Inception, June 16, 2023). Source: Morningstar, as of June 30, 2024.
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