BMO Global Asset Management

BMO Global Asset Management

June 16, 2015 08:03 ET

BMO Global Asset Management White Paper: Building a Better Target Date Fund

Latest white paper outlines approach to target date funds, focusing on balancing investor risks and outcomes

CHICAGO, ILLINOIS--(Marketwired - June 16, 2015) - BMO Global Asset Management today released their latest white paper, Insights: Building better target date funds. The paper provides detailed insights into the firm's guiding philosophy and process for both the design and management of the BMO Target Date Retirement Funds and how that has led to better outcomes for investors.

BMO Global Asset Management has been delivering target date strategies to investors for more than 10 years and, more generally, managing multi-asset solutions for more than two decades. According to Morningstar, all 10 of the BMO Target Date Retirement Funds rank in the top quartile of their peer group for total returns in their respective since inception periods, through March 31, 2015 - and 8 of their 10 Funds ranked in the top 10 percent.

Within the paper, BMO Global Asset Management discusses the various risks retirement investors face. More importantly, they also outline three keys to how experienced target date fund providers can more effectively help solve the problems investors face. They include:

  • Open manager selection: employing managers from different firms provide target date managers with access to expertise from some of the world's top money managers
  • Active and passive investments: deciding to use active or passive strategies can help provide exposure to fully efficient markets while managing expenses
  • Adaptable approach: adapting allocations to address changing market environments allows a target date manager to address risk and add value

Lowell Yura, Head of Multi-Asset Solutions, BMO Asset Management Corp, emphasized the need for target date fund managers to be adaptable. "The face of retirement is changing. In fact, research currently shows that 23 percent of today's retirees have continued to work after formally retiring. Going forward, studies suggest as many as two thirds of retirees expect to continue working in some capacity. Given these trends, we believe fund managers should provide solutions that address the needs of future retirees better and ideally reduce the necessity for postretirement employment."

Led by Mr. Yura, the 15-person Multi-Asset Solutions Team is dedicated to building best-in-class investment offerings, using the firm's open architecture platform. With more than $4 billion in assets under their management in both target date and target risk funds, the team averages more than 20 years of industry experience and each of the funds' four co-managers has more than 25 years of investment experience.

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About the BMO Family of Funds

The BMO Funds is a global family of actively managed mutual funds and is ranked #2 among Barron's 2015 Best Fund Family. The firm's funds span the risk/reward spectrum and include: U.S., non-U.S. and global equity funds, U.S. (taxable and tax-free) and emerging markets fixed income funds, money market funds, and a range of multi-asset funds offering outcome-oriented solutions for investors.

About BMO Global Asset Management

BMO Global Asset Management is a global investment manager delivering service excellence from 24 offices in 14 countries to clients across five continents. Including discretionary and nondiscretionary assets, BMO Global Asset Management had more than $254 billion in assets under management, as of April 30, 2015.

Headquartered by four multi-disciplined investment teams based in Toronto, Chicago/Milwaukee, London and Hong Kong, the organization is complemented by a network of world-class boutique managers strategically located across the globe. They include LGM Investments, Monegy, Inc., Pyrford International Ltd., and Taplin, Canida & Habacht, LLC. With operations throughout North America and Europe, and in Abu Dhabi, Mumbai, Beijing, Shanghai, Hong Kong, Melbourne and Sydney, BMO Global Asset Management has been recognized by Pension & Investments as one of the world's largest 100 asset managers based on combined assets under management as of December 31, 2013 and is a signatory of the United Nations-supported Principles for Responsible Investment initiative (UNPRI).

BMO Global Asset Management is a part of BMO Financial Group (NYSE:BMO), a fully diversified financial services organization with C$633 billion total assets as of April 30, 2015 and more than 47,000 employees.


Research cited refers to the Employment Benefit Research Institute's 2015 Retirement Confidence Survey.

All investments involve risk, including the possible loss of principal.

The principal value of the Target Date Retirement Funds is not guaranteed at any time, including at or after the target date. The target date refers to the approximate year when an investor in the Fund would start withdrawing from the investment, which is assumed age 65. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income and principal stability during retirement. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility.

The investment risks of each Target Date Retirement Fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risks associated with investing in high yield, small cap, commodity-linked, and foreign securities.

You should consider the Fund's investment objectives, risks, charges, and expenses carefully before investing. For a prospectus and/or summary prospectus, which contain this and other information about the BMO Funds, call 1-800-236-3863. Please read it carefully before investing.

Investment returns and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. Investor should consider his or her current and anticipated investment horizon and income tax bracket when making an investment decision. For more information about performance, please contact your investment professional.

©2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics. Morningstar Rating is for the I share class only; other classes may have different performance characteristics.

BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, retirement, 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 Asset Management U.S. consists of BMO Asset Management Corp.

BMO Asset Management Corp. is the investment adviser to the BMO Funds. BMO Investment Distributors, LLC is the distributor. Member FINRA/SPIC. BMO Funds are not marketed or sold outside the United States.

Investment products are: Not FDIC Insured / No Bank Guarantee / May Lose Value

©2015 BMO Financial Corp.

Research cited refers to the Employment Benefit Research Institute's 2014 Retirement Confidence Survey.

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