BMO Announces Notional Distributions and Tax Adjustments for Certain Exchange-Traded Funds

TORONTO, April 19, 2024 /CNW/ - BMO Asset Management Inc. ("BMOAM Inc."), the manager of the BMO ETFs, today announced notional non-cash reinvested distributions (each a "Notional Distribution") and tax adjustments for certain BMO ETFs.

A Notional Distribution occurs when a BMO ETF makes a distribution in the form of units, which are then immediately consolidated with the units issued and outstanding held prior to the distribution, so that the total number of units held after the distribution is identical to the number of units held prior to the distribution.

Each BMO ETF listed in the following table made a Notional Distribution, expressed in the table as a dollar amount per unit, to all unitholders of record on the relevant Record Date:

BMOAM Inc. will update the tax characteristics of the 2023 distributions of each of these BMO ETFs, as well as the 2023 distributions of BMO US Equity Buffer Hedged to CAD ETF - October (Cboe Canada: ZOCT), which will be reported to brokers via the Canadian Depository for Securities.

Each of these BMO ETFs was launched in 2023. These tax adjustments occurred because none of these BMO ETFs has qualified as a 'mutual fund trust' under the Income Tax Act (Canada) (the "Tax Act"), and each has been a 'financial institution' as defined under the Tax Act for at least a portion of its existence:

• Each of BMO Long Short US Equity ETF and BMO US Equity Buffer Hedged to CAD ETF – October was a 'financial institution' for a portion of its existence, and
  
  
• Each of BMO Canadian Banks Accelerator ETF, BMO Long Short Canadian Equity ETF and BMO US Equity Accelerator Hedged to CAD ETF was, and continues to be, a 'financial institution'.

Generally, a BMO ETF is a 'financial institution' at any time that it does not qualify as a 'mutual fund trust' if more than 50% of its units are held by one or more 'financial institutions'. Each BMO ETF that became or ceased to be a "financial institution" experienced, on that date, a deemed year end for tax purposes, and was required to distribute taxable income, if any, as of the deemed year end.

Further information about BMO ETFs can be found at bmoetfs.comhttps://www.bmoetfs.ca/

About BMO Exchange Traded Funds (ETFs)
BMO Exchange Traded Funds has been an ETF provider in Canada for more than 14 years, with over 1800 strategies, over 23 per cent market share in Canada, and $97.5 billion in assets under management1. BMO ETFs are designed to stay ahead of market trends and provide compelling solutions to help advisors and investors. This includes a comprehensive suite of ETFs developed in Canada for Canadians, such as cost-effective core equity ETFs following market leading indexes, and a broad range of fixed income ETFs; solution-based ETFs responding to client demand; and innovation with smart beta ETFs, as well as combining active and passive investing with ETF series of active mutual funds.

1Morningstar, December 2023

About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of January 31, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

Disclaimers:

Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. Exchange traded 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 ETFs, please see the specific risks set out in the BMO ETF's prospectus. BMO ETFs 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.

BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.

Distributions are not guaranteed and may fluctuate. Distribution rates may change without notice (up or down) depending on market conditions. The payment of distributions should not be confused with an investment fund's performance, rate of return or yield. If distributions paid by an investment fund are greater than the performance of the fund, your original investment will shrink.

Distributions of net income and net taxable gains of a BMO ETF will be included in the unitholder's income for tax purposes in the year they are paid, whether or not such amounts are reinvested in additional units. A unitholder's adjusted cost base will be reduced by the amount of any returns of capital. If a unitholder's adjusted cost base goes below zero, such unitholder will have to pay capital gains tax on the amount below zero. Please refer to the summary of the principal income tax considerations set out in the prospectus for the relevant BMO ETF. Investors should also consult their own tax advisors about their individual circumstances.

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SOURCE BMO Financial Group

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