BMO Corporate Bond ETFs

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1 For professional investors only Exchange Traded Funds PAGE 1 BMO Corporate Bond ETFs Diversified, global bond exposure ember 20 Contact us Client Services +44 (0) [email protected] bmogam.com/etfs ZC1G BMO Barclays 1 3 Year Global Corporate Bond (GBP Hedged) UCITS ETF ZC3G BMO Barclays 3 7 Year Global Corporate Bond (GBP Hedged) UCITS ETF ZC7G BMO Barclays 7 10 Year Global Corporate Bond (GBP Hedged) UCITS ETF ZHYG BMO Barclays Global High Yield Bond (GBP Hedged) UCITS ETF Our suite of corporate bond ETFs offer duration building blocks to help asset allocators construct fixed income portfolios. Our ETFs use an optimised approach based on the VLI (Very Liquid Index) subset of the Barclays index. They provide the yield and duration benefits of corporate bonds coupled with currency hedged global diversification. Corporate bonds The economic developments of recent years have seen yields of government debt fall to record low levels. Corporate bonds offer investors the opportunity of a higher return while still meeting their duration requirements. We expect institutions to continue, and even accelerate, a shift in allocation to corporate bonds, driving returns in the asset class. Maturity bands BMO Global Asset Management are introducing an innovative approach by launching a series of ETFs split over the maturity spectrum. This gives investors the ability to implement a precise positioning strategy within the corporate universe. Hedged global diversification These ETFs offer diversification globally, across country and issuer while removing the additional volatility of currency movements. By embedding a currency hedging strategy, investors are able to mitigate the effects of currency fluctuations. Returns are derived from corporate bond exposure. Partnering with Barclays We have partnered with Barclays, a global leader in fixed income indices who offer unmatched market coverage. Our suite of precise corporate ETFs are benchmarked to indices with VLI filters; offering investors diversified, global, fixed interest exposure with the added flexibility of maturity banding. Parent index VLI subset Maturity bands Barclays Global Aggregate Corp Index Barclays Global Corp VLI Barclays Global HY Corp VLI 1-3 years 3-7 years 7-10 years BMO Global Corporate Bond ETFs

2 PAGE 2 Precision Investing with ETFs Given the current low yield environment, there is a greater need for investors to have the flexibility to position where they want to be on the yield curve and to change the overall duration of their portfolios to manage yield and to reduce volatility. BMO Global Asset Management has launched a suite of innovative investment grade global corporate bond ETFs offering a spectrum of maturity bands allowing investors to precisely position their portfolios on the yield curve. Additionally, a high yield bond ETF compliments this product suite. These innovative instruments can help absorb interest rate moves effectively. Diversification Global exposure Precision Maturity bands enable: Access to credit spread differentials Curve targeting Duration management Risk Control Currency hedged Our suite of fixed income ETFs provides convenient and efficient exposure to global corporate and high yield bonds, offering liquidity, yield and diversification tapping into global yield opportunities with the benefit of added currency hedging. Strategic and tactical investment decisions are now possible through our full suite of targeted ETFs in the form of maturity bands. Innovative Indices The Very Liquid Index (VLI) provides a narrower subset of the Barclays broad-based flagship index, the Barclays Global Aggregate Bond Index. The VLI follows the same eligibility criteria as the index on which it is based, but only includes recently issued bonds with a higher minimum per amount outstanding and restricts inclusion by issuer to only their largest issue or issues. The VLI offers similar exposure to the same maturity subset of the broad index. The VLI benchmarks enable the construction of portfolios with improved operational efficiency when accessing global corporate and high yield bond markets. This allows for better trading efficiency within the portfolios while maintaining broad diversification of a global portfolio. VLI index construction Improved tradability Universe Sector Amount outstanding Largest issue constraint Parent Index: Bond Index Incorporating only corporate issuers: Corporate Bond Index Min US$ 750m issuance (Corporate Bonds) Min US$ 500m or equivalent issue size (High Yield) 3 largest bonds per issuer and amount outstanding Seasoning cap Less than five years seasoning to ensure there is a liquid market for the issue Issuer cap VLI 2% issuer cap to ensure diversification BMO Corporate Bond ETFs track the Barclays VLI Global Corporate Bonds Additional Screens: Must be rated investment grade Segmented by maturity band Global High Yield Bonds Additional Screens: Must be rated high yield (Ba1 or lower) Maturity greater than one year Excludes 4a securities (private placement exemption from registration) USD, EUR, GBP, CHF and SEK eligible securities The ETFs provide precision tools to gain exposure to different segments of the corporate bond yield curve, supporting flexible portfolio construction, i.e. liability matching or to express specific views, thus permitting tactical positioning to varying sensitivity to changes in market interest rates. The index is rebalanced on a monthly basis to include qualifying new issues and remove any bonds that may have fallen out of the required screen.

3 PAGE 3 BMO Corporate Bond ETFs provide exposure to the Barclays Very Liquid Indices. The ETFs optimise the VLI underlying basket of constituents. Statistics % by quality Index Number of bonds ket value % of Corp ket value % of maturity ket value ($bn) Option adjusted duration Option adjusted spread Yield to maturity Yield to worst Liquidity cost score Aaa Aa A Baa Global Agg Corp 9, % 100% 7, Global Agg Corporate 1-3 Yrs 2,243 24% 100% 1, GA Corp 1-3 VLI 452 7% 31% Global Agg Corporate 3-7 Yrs 3,324 36% 100% 2, GA Corp 3-7 VLI 738 % 35% Global Agg Corporate 7-10 Yrs 1,675 18% 100% 1, GA Corp 7-10 VLI 546 9% 51% Source: Barclays POINT, as at 31 August 20. Statistics % by quality % by currency Index Number of bonds ket value % of Corp ket value ($bn) Option adjusted duration Option adjusted spread Yield to maturity Yield to worst Liquidity cost score Ba B Caa Ca-NR USD EUR GBP CHF SEK Global HY Corp (US HY + Pan Euro HY) 2, % 1, Global HY Corp VLI % Global HY Corp VLI Ex 4A Hedged to GBP % Source: Barclays POINT, as at 31 August 20. ETF OCF Bloomberg Ticker BMO Barclays 1-3 Year Global Corporate Bond (GBP Hedged) UCITS ETF 0.30% ZC1G LN BMO Barclays 3-7 Year Global Corporate Bond (GBP Hedged) UCITS ETF 0.30% ZC3G LN BMO Barclays 7-10 Year Global Corporate Bond (GBP Hedged) UCITS ETF 0.30% ZC7G LN BMO Barclays Global High Yield Bond (GBP Hedged) UCITS ETF 0.35% ZHYG LN Source: Barclays and BMO Global Asset Management Agg - Aggregate; Corp - Corporate; HY - High yield.

4 PAGE 4 Maturity bands and VLI filtering Liquidity matters, particularly during times of credit stress. Selecting a VLI filter of the parent universe has a positive impact on the improvement of the intrinsic trading costs of the index components measured by the Barclays Liquidity Cost Score (LCS) metric*. The VLI benchmarks aim to reduce tracking error and introduce lower replication costs versus using the parent, broad market universe. The graphs below demonstrate for all 4 instruments, consistent returns of the filtered benchmarks and the reduction of the liquidity cost score. The shaded area on the liquidity cost score graphs show the period of the financial crisis. The returns graphs show index levels, rebalanced to 100 on 30 tember Returns Liquidity cost score differential** 1-3 Years Index levels Apr Apr GA Corp 1-3 VLI Global Agg Corp 1-3 Global Agg Corp 0.0 Index levels GA Corp 3-7 VLI Global Agg Corp 3-7 Global Agg Corp 180 Index levels Apr GA Corp 7-10 VLI Global Agg Corp 7-10 Global Agg Corp Apr Years 7-10 Years High Yield 0.0 Index levels Global HY VLI ex 4A Global HY Global Agg Corp Source: Barclays POINT, as at 31 August 20. * LCS Cost as % of bond price to execute a round turn transaction, ratings are averages of outstanding ratings agency values. ** LCS differential between the VLI and the parent index.

5 PAGE 5 Global Corporate Bond Very Liquid Indices sector weights 1-3 Years 3-7 Years 7-10 Years High yield (HY) Global Aggegate Corporate Corporate 1-3 Yrs Corporate 1-3 VLI Corporate 3-7 Yrs Corporate 3-7 VLI Corporate 7-10 Yrs Corporate 7-10 VLI Global HY Corporate (US HY + PE HY) Global HY VLI ex 4A Total Industrial Basic industry Capital goods Consumer cyclical Consumer non-cyclical Energy Technology Transportation Communications Other industrial Utility Electric Natural gas Other utility Financial institutions Banking Brokerage asset managers exchanges Finance companies Insurance REIT Other financial Source: Barclays POINT, as at 31 August 20. Calculated by applying the sector, liquidity and maturity screens to the parent index. All data rounded to nearest 2 decimal places. REIT - Real Estate Investment Trust; PE - Pan European.

6 PAGE 6 Currency Hedging When investing in global bonds, currency fluctuations typically have a meaningful impact on portfolio returns. Investors are implicitly taking bets on currency movements. Hedging currency risk can significantly reduce the return volatility of global bond investments, giving investors better risk control; by removing currency volatility, returns can be attributed solely to performance of the credit exposure. BMO Global Corporate Bond and Global High Yield Bond UCITS ETFs with embedded currency hedging aim to provide investors with smoother returns over time. Currency dominates performance in the unhedged index in GBP terms. Contribution to index returns Unhedged GBP (Example: Barclays Global Corporate 1-3 Very Liquid Index) % Price Coupon Currency Source: Barclays POINT, as at 31 August 20. BMO Global Asset Management currency-hedged ETFs aim to offer investors a smoother credit focused return stream. By embedding a currency hedging strategy, investors are able to mitigate the effects of currency fluctuations on their returns. Contribution to index returns Hedged GBP (Example: Barclays Global Corporate 1-3 Very Liquid Index Hedged to GBP) % Price Coupon Currency Source: Barclays POINT, as at 31 August 20. The Barclays Global Corporate VLI 1-3 Years Index is used to show how the currency hedging can provide smoother returns. Example for illustrative purposes only.

7 PAGE 7 Standard Deviation Hedged VLI benchmarks show lower standard deviation than their unhedged versions. Standard deviation (%) 3 Years 5 Years 10 Years Hedged Unhedged Hedged Unhedged Hedged Unhedged Corp 1-3 VLI Corp 3-7 VLI Corp 7-10 VLI Global HY VLI ex 4A Source: Barclays POINT, as at 31 August 20. However, within the high yield asset class, credit risk is a stronger driver of performance than currency risk for unhedged returns and, furthermore, currency risk can act as a diversifier for credit risk. By way of example, in the financial crisis of 2008/2009, US dollar strength coincided with losses in high yield markets, and the reverse was true in the immediate aftermath of the crisis. Contribution to Index Returns Global High Yield VLI ex 4A Unhedged GBP % Price Coupon Currency Source: Barclays POINT, as at 31 August 20.

8 PAGE 8 For professional investors only. F&C Management Limited is the investment manager of BMO UCITS ETF ICAV which is authorised by the Central Bank of Ireland as a UCITS. Shares are listed on the London Stock Exchange and may be purchased and sold on the exchange through a broker-dealer. Purchasing and selling shares may result in brokerage commissions. Applications for subscriptions directly to the funds may only be made by authorised participants. Shares purchased on the secondary market cannot usually be sold directly back to the Fund. Secondary market investors must buy and sell ETF Shares with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current Net Asset Value per Share when buying ETF Shares and may receive less than the current Net Asset Value per Share when selling them. Commissions, fees, costs and expenses all may be associated with investments in exchange traded funds. Please read the prospectus and key investor information document (KIID) before investing. Investment objectives, risk information, fees and expenses and other important information about the funds can be found in the prospectus. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated. This document is provided for information purposes only and is not to be construed as investment advice to a recipient on the merits of any investment. This document does not constitute, or form part of, any solicitation of any offer to deal in any type of investment. This document is provided only to assist financially sophisticated investors in their independent review of particular investments and is not intended to be, and must not be relied upon, as the sole basis for any investment decision. This document must not be acted on or relied on by persons who are not relevant persons and who are not the intended recipients of this document. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of any investment, and should consult its own legal counsel and financial, actuarial, accounting, regulatory and tax advisers to evaluate any such investment. Past performance should not be seen as an indication of future performance. The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested. Investing in ETFs involves risk, including risks associated with market volatility, currency rate fluctuations, replication strategies, and changes in composition of the underlying index and assets. Diversification and asset class allocation do not guarantee profit or protect against loss. Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any products that may be mentioned. The Barclays marks are trademarks of Barclays Bank PLC or its affiliates ( Barclays ) and have been licensed for use in connection with the issuance and distribution of the BMO UCITS ETF ICAV. The BMO UCITS ETF ICAV is not sponsored by, endorsed, sold or promoted by Barclays, and Barclays makes no representation regarding the advisability of investing in it. 20 BMO Global Asset Management. All rights reserved. BMO Global Asset Management is a trading name of F&C Management Limited, which is authorised and regulated by the Financial Conduct Authority. CM06398 (09/).