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Engineered for enhanced income

Investors’ number one worry when it comes to saving for the future is running out of money. A decade of low yields has produced a cohort of investors looking for enhanced returns from higher-yielding strategies, without sacrificing a high degree of protection. With longer lifespans and an aging population, advisors are called on more and more to help meet this client need by mapping out — and then delivering — the appropriate solutions.

More income with less volatility

BMO GAM's Covered Call Mutual Funds and ETFs

  • Exposure to high dividend equities, biased toward quality
  • Writing call option contracts enhances cash flow with the call option premium
  • As markets fluctuate, covered call strategies tend to provide the exposure of the underlying stocks, with less volatility due to the premium
  • Additional income generated by covered call strategies is generally treated as capital gains, reducing the overall tax impact

Search for yield has become increasingly difficult

Despite recent tightening, yields remain very low relative to historical norms. Aging clients – retirees and pre-retirees – require higher yields and sustainable monthly income.

Engineered for enhanced income - Searching for yield has become increasingly difficult

Source: Bloomberg. Data through November 30th, 2018. For illustrative purposes only.

Having a dividend matters

Historically, dividend growers tend to outperform over time, with lower levels of volatility. Investments with higher yield and lower volatility can help to meet your clients’ income needs, while offering a smoother investment experience.

Annualized volatility

Engineered for enhanced income - Annualized volatility

Source: BMO Investment Strategy Group, unweighted. Data as of July 31st, 2018 (Analysis begins in January 1990). For illustrative purposes only.

Total returns

Engineered for enhanced income - Total returns

Source: BMO Investment Strategy Group, unweighted. Data as of July 31st, 2018 (Analysis begins in January 1990). For illustrative purposes only.

Yield: We offer more than the index

BMO GAM’s four covered call strategies provide exposure to dividend yielding companies in Canada, U.S. and Europe, with lower volatility and higher income.

Engineered for enhanced income - Yield we offer more than the index

Source: BMO Global Asset Management. Distribution yield of F Series funds and indices as of November 1st, 2018. For illustrative purposes only.

Learn about more options for enhanced income

Solutions for your other client needs

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Commissions, trailing commissions (if applicable), management fees and expenses all may be associated with mutual fund investments. Please read the ETF facts, fund facts or prospectus of the relevant mutual fund before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

For a summary of the risks of an investment in the BMO Mutual Funds, please see the specific risks set out in the prospectus. ETF Series of the BMO Mutual Funds trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.

The BMO ETFs or securities referred to herein are not sponsored, endorsed or promoted by MSCI Inc. (“MSCI”), and MSCI bears no liability with respect to any such BMO ETFs or securities or any index on which such BMO ETFs or securities are based. The prospectus of the BMO ETFs contains a more detailed description of the limited relationship MSCI has with BMO Asset Management Inc. and any related BMO ETFs.

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Limited and BMO’s specialized investment management firms.

BMO ETFs are managed and administered by BMO Asset Management Inc., an investment fund manager and portfolio manager and separate legal entity from the Bank of Montreal. BMO Mutual Funds refers to certain mutual funds and/or series of mutual funds offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal.