All investments involve risk, including the possible loss of principal.
Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. All of these factors can subject the funds to increased loss of principal.
Keep in mind that as interest rates rise, prices for bonds with fixed interest rates may fall.
Municipal bonds are subject to risks including economic and regulatory developments in the federal and state tax structure, deregulation, court rulings, and other factors.
Diversification neither assures a profit nor guarantees against loss in a declining market.
The Bloomberg Barclays Municipal Bond Index is considered representative of the broad market for investment grade, tax-exempt bonds with a maturity of at least one year.
Bloomberg Barclays 1-10 Year Blend Municipal Bond Index is an unmanaged index of municipal bonds rated BBB or better with 1 to 12 years to maturity.
The S&P 500® Index is an unmanaged index of large-cap common stocks.
Investments cannot be made in an index.
BMO Funds receives credit quality ratings on underlying securities of the Fund from Bloomberg Barclays using ratings from Moody’s Investors Service (Moody’s), Fitch Ratings (Fitch) and Standard & Poor’s (S&P).
If the ratings vary by agency, the following methodology is used: If Moody’s, S&P and Fitch all provide a credit rating, the rating used is the median of the three agency ratings. If only two agencies provide ratings, the rating used is the more conservative rating. If only one agency provides a rating, the rating reflects that agency’s rating. Securities that are not rated by any of the three agencies are reflected as such in the breakdown. Ratings and portfolio credit quality may change over time. Unrated securities do not necessarily indicate low quality. The Fund itself has not been rated by an independent rating agency.
Obligations rated Aa by Moodys are judged to be of high quality and are subject to very low credit risk.
Obligations rated A by Moodys are judged to be upper-medium grade and are subject to low credit risk.
Obligations rated Baa by Moodys are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
An obligation rated ‘AA’ by S&P differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitments on the obligation is very strong. An obligation rated ‘BBB’ by S&P exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor’s capacity to meet its financial commitments on the obligation.
Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.
The option-adjusted spread (OAS) is the measurement of the spread of a fixed-income security rate and the risk-free rate of return, which is adjusted to take into account an embedded option. Bps (bps) represent 1/100th of a percent (for example: 50 bps equals 0.50%).
Views and opinions have been arrived at by BMO Global Asset Management. The information, estimates or forecasts provided were obtained from sources reasonably deemed to be reliable but are subject to change at any time. This publication is prepared for general information only; it should not be construed as investment advice or relied upon in making an investment decision. All investments involve risk, including the loss of principal. Past performance is not a guarantee of future results.
Interest income from tax-exempt investments may be subject to the federal alternative minimum tax (AMT) for individuals and corporations, and state and local taxes.
Investments in municipal securities may not be appropriate for all investors, particularly those who do not stand to benefit from the tax status of the investment. Municipal bond interest is not subject to federal income tax but may be subject to AMT, state or local taxes.
You should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. For a prospectus, which contains this and other information about the BMO Funds, call 1-800-236-3863. Please read it carefully before investing.
BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management and trust and custody services. Certain of the products and services offered under the brand name BMO Global Asset Management are designed specifically for various categories of investors in a number of different countries and regions and may not be available to all investors.
Products and services are only offered to such investors in those countries and regions in accordance with applicable laws and regulations. BMO Financial Group is a service mark of Bank of Montreal (BMO).
BMO Financial Group is a service mark of Bank of Montreal (BMO). BMO Asset Management Corp. is the investment adviser to the BMO Funds. BMO Funds are distributed by Foreside Financial Services, LLC.
BMO Asset Management Corp., BMO Private Bank, BMO Harris Bank N.A. and BMO Harris Financial Advisors, Inc. are affiliated companies. BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A.
Investment products are: NOT A DEPOSIT — NOT FDIC INSURED — NOT BANK GUARANTEED — MAY LOSE VALUE
© 2020 BMO Financial Corp. (12/20)