BMO ETF Portfolio Strategy Report

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In this report:

Recent Developments ...............1

Things to Keep an Eye on ..........2

Changes to the Portfolio Strategy .....................3

Stats and Portfolio Holdings ...................................4

Portfolio Characteristics ...........5

The Good, the Bad, and the Ugly .............................6

All prices or returns as of market close on January 9, 2015, unless otherwise indicated.

Alfred Lee, CFA, CMT, DMS Vice President, BMO ETFsPortfolio Manager & Investment StrategistBMO Asset Management Inc.alfred.lee@bmo.com

In this report, we highlight our strategic and tactical portfolio positioning strategies for the first quarter using various BMO Exchange Traded Funds. Our key strategy changes are outlined throughout the report and in our quarterly outlook on page six.

• Whether the U.S. Federal Reserve (“Fed”) will finally raise its overnight lending rate in 2015 will be one of the major focal points later in the year.InthewakeofanencouragingU.S.jobsreportanditsunemploymentrecentlyfallingto5.7%,thereisagrowingpossibilitythattheFedwilltightenitsmonetarypolicyatsomepoint.Barringamajorglobaleconomicslowdown,weanticipatearatehikeinthesecondhalfoftheyear.However,withnosignsofinflation,weexpecttheFedratetoremainlowwiththerateaneighthorquarterpointhigheratyear’send.

• Although we expect the U.S. central bank to become more hawkish, economic data out of Europe and Asia has shown signs of waning momentum. Forexample,thePurchasing Manager’s Index (PMI)forboththeEuro-zoneandAsiahavebeentrendinglower.Inaddition,slowinginflationhasbecomeaconcerninbothareas.Thismaypromptthecentralbankstointervene,likelybenefitingthedefensiveorientedassetsanddividendpayingstocksofthearea.Economicgrowthwilllikelyincreasinglydiverge,withtheU.S.shoulderingglobalgrowth,buttherateofoverallglobaleconomicexpansionmayslow.Thevaryingmonetarypoliciesofdifferentregions,however,shouldcreateassetallocationopportunities.

• In addition to diverging interest rates, falling crude prices may create a further divide between various economies.IftheOrganizationofPetroleumExportingCountries(OPEC)continuestorefrainfromcuttingproduction,depressedoilpricescouldbeanongoingheadwindforoilexportingcountries,especiallyforhighercostproducerssuchasCanada.Weexpectthisimbalancetobecorrectedatsomepointin2015,particularlywithsomeOPECmembersalreadycallingtocutproduction.

• Uncertain energy prices and diverging yields between various sovereign bonds should be catalysts that lead to growing opportunities for asset and sector allocation strategies.Duetothesetwofactors,weexpectcorrelationsbetweendifferentassetclassestocontinuetodecline,aswesawin2014(ChartA).Consequently,alphagenerationthroughtopdownstrategiesshouldbecomemorerewardingastheyearprogresses.

• With slower economic growth in certain areas, lower energy prices and slower velocity of money, deflationary pressures may arise in some economies.Inadditiontoassetandsectorallocation,awell-constructedportfolioshouldconsiderexposuretospecificmarketfactors(suchaslowvolatilityordividends)andcurrencyexposure(hedgedorunhedged)dependingoftherespectiveregion.Higherbetastocks,whichhavefaredwellintheU.S.overthelast30-months,seemtobelosingmomentum.Similartootherregions,lowerbetastocksseemtobegainingrelativestrengthoverthebroadS&P 500 Composite Index (ChartB).ShouldtheU.S.FederalReservetakeamorehawkishtone,weexpectafurthertailwindbehindlowerbetastocksintheU.S.

A Diverging Landscape

Chart A: Lower Intra-Market Correlations Chart B: U.S. Low Beta Stocks beginning to Outperform S&P 500 Composite

Source: BMO Asset Management Inc., Bloomberg Source: BMO Asset Management Inc., Bloomberg

BMO EXCHANGE TRADED FUNDSF i r s t Quar ter 2015

Portfolio Strategy Report – First Quarter 2015 2

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Things to Keep an Eye on...

Oneadvantageoflowerenergypricesisthatitactsasafiscalstimulus,allowingconsumerstohavemoredisposableincome.Europeanequities,towhichwehaveincreasedourallocationinthelastyearshouldbenefit.Whenlookingatrecenttrendsofyear-over-year(y/y)Euro-zonespendinggrowthinrelationtoenergyprices,anegativecorrelationisexhibited.Thissuggeststhatasenergypricesdecline,Europeanconsumerstendtohavemoredisposableincometospendonnecessitiesandgoods.

Recommendation:Severalquartersago,weaddedtheBMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ)toourportfoliostrategy.Itscombined47.5%inboththeconsumerdiscretionaryandconsumerstaplesectorsshouldfarewellshouldoilpricesremaindepressed.Atthesametime,itcouldmakealong-termholdingforaportfolioregardlessoftheoutcomeincrudeprices,astheETFscreensforhigherqualitycompaniesusingmetricssuchashighreturnonequity(ROE)andstableyear-over-yearearnings.AsthemonetarypolicyoftheEuropeanCentralBank(ECB)willlikelyremainaccommodative,thecurrencyhedgewillmitigateanypotentialweaknessoftheunderlyingcurrencyoftheEuropeanstocks.

Sincemid-Juneof2014,oil(BrentCrude)priceshavefallen56.4%toUS$50.11/barrel.Whilethishasbeenadetractorfromtheequitymarketsofcommodityexportingcountries,thepositiveisthatthishasbeensupplysidedriven,ratherthanbeingaresultoffallingdemand.Momentumindicatorshavesuggestedcrudepriceshavebeenoversoldforweeks.ShouldOPECdecidetocurbsupply,oilpricescanquicklyrallytomore“normalized”levels.Thegreaterquestion,however,ishowlongOPECiswillingandabletosustainloweroilprices.

Recommendation:Sustainedloweroilpriceswouldcontinuetobenefitourportfoliostrategy,aswehavebeenunderweighttheenergysector.Shouldoilpricesrebound,ourstrategywouldlikelysurrendersomeoutperformance.Ratherthanutilizingcoreexposurestoobtainenergyexposure,werecommendinvestorsinsteadconsidertacticalpositionsofenergyETFs,suchastheBMO S&P/TSX Equal Weight Oil & Gas Index ETF (ZEO).Bydoingso,thepositioncouldbeefficientlyremovedfromtheportfoliomix,whetherornotabounce-backinoilpricestranspires.

Source: BMO Asset Management Inc., Bloomberg

Source: BMO Asset Management Inc., Bloomberg

Lastquarter,wedecreasedourexposuretoU.S.highyieldbondsbyreducingourpositionintheBMO High Yield U.S. Corporate Bond Hedged to CAD Index ETF (ZHY)by3.0%.Thisdecisionwaspartiallymadebasedontheexpectationofwiderhighyieldcreditspreads,asweanticipatedaslowdowninthefourthquarter,whichdidmaterialize.The3.0%allocation,weusedtoincreaseourpositioninthemid-termU.S.investmentgradebonds,usingtheBMO Mid-Term US IG Corporate Bond Index ETF (ZIC).Overthefourthquarter,ZICoutperformedZHYby6.3%onatotalreturnbasis.Partoftheoutperformancehowever,didcomefromtheU.S.dollarexposureofZIC.

Recommendation:Goingforward,wedoexpectahigherand/orsteeperU.S.treasurycurvetobeaslightheadwindforU.S.highyieldbonds.HigherratesintheU.S.couldleadinvestorstode-riskabondportfolioashighercouponscouldbederivedfromhigherqualitybonds.Wedocontinuetoseeinvestmentgradebondstobeasweetspot,shouldtheU.S.FederalReservetightenmonetarypolicy.However,therecentwideningoftheHighYieldspreadsasindicatedbytheHighYieldCDXspread,presentssomepotentialtotightenahead.ToreduceU.S.durationriskhowever,theBMO Floating Rate High Yield ETF (ZFH)canbeused.

Source: BMO Asset Management Inc., Bloomberg

Portfolio Strategy Report – First Quarter 2015 3

Changes to Portfolio StrategyAsset Allocation:

• Asmentionedinourlastreport,weexpectedacorrectionintheequityandcreditmarketsinthefinalquarterof2014.Ourportfoliostrategyaddedsomesignificantoutperformancerelativetoourbenchmarkoverthequarterasaresultofsomeoftherecentchangeswemade.InadditiontoourongoingoverweighttotheU.S.andourunderweighttoenergy,ourdecisiontoreduceexposuretoU.S.highyieldbondslastquarter,hasbeenapositivefordownsideprotection.

• WeexpectamorehawkishenvironmentintheU.S.,whereasmonetaryconditionswilllikelyremainstatusquoormorerelaxedinotherareas.Agrowingdivideininterestrateswouldnotonlyhaveramificationsonthebondmarkets,butalsowouldaffectotherassetclassesgiventheinter-marketrelationships.

• Overall,weremaincontentwithourassetallocationmix,aswearestillmorebullishonequitiesandcredit.However,wearemakingadjustmentswithintheassetclassestobetterpositionourportfolioforbothshortandlonger-termopportunities.

Fixed Income:

• Interestratefutureshaveimpliedagreaterpossibilityofaratechange(bothhigherandlower)fromtheBankofCanada(BoC)bytheendof2015.WiththeBoCgovernor,preferringalowerCanadiandollar,weseearatehikethisyeartobeunlikely.Unlessweexperiencesustainedloweroilprices,whichwilleventuallyimpactCanada’sgrossdomesticproduct(GDP),wedon’texpectalowerovernightrateinCanadaeither.Astheyearprogresses,wewouldlooktopossiblytakedurationriskinCanadianbonds,whiletakinglessdurationriskwithourU.S.fixedincomeexposure.

• Forthemeantime,weareleavingourallocationtoinvestmentgradefixedincomeunchanged.WewouldkeepaneyeonthetrendofthespreadbetweenCanadianandU.S.10-yearbondyield.ShouldaFederalReserveratehikebecomemoreimminent,wewouldlooktoreduceU.S.durationexposure,whileincreasingourexposuretothemid-part(“thebelly”)oftheyieldcurveinCanada.

Equities:

• Asmentionedpreviously,weenvisionagreaterdivergenceinmonetarypolicygoingforward.Weexpectthistoleadtoagreaterdivergenceinregionalassetperformance.EconomicdataoutsideoftheU.S.hasshownsignsofweakness,whichwilllikelypreventcentralbanksinEuropeandAsiafromtighteningmonetarypolicy.Thisshouldcontinuetoplacebuyingpressureonyieldintheseareas.Asaresult,weareinitiatinga6.0%positionintheBMO International Dividend ETF (ZDI).

• ThelackofsectordiversificationhasbeenbeneficialfortheCanadianequitymarketoverthelastdecade,withitsthreemainsectorsperformingwell.However,withgreateruncertaintyinenergyandopportunitiesarisinginotherglobalequitymarkets,wearelookingtoincreaseourglobaldiversification.AlthoughwearestillpositiveonCanadiandividends,wearereducingourpositionintheBMO Canadian Dividend ETF (ZDV)by4.0%topartiallyfundournewallocationinZDI.

• HigherbetaequitystrategieshaveperformedwellintheU.S.sincemid-2012,buthaverecentlybeguntolosemomentum.Ontheotherhand,lowerbetaU.S.equitystrategies,havebeengainingstrengthrelativetotheS&P 500 Composite Index.Inaddition,withequitymarketvolatility,asindicatedbytheCBOE/S&P Implied Volatility Index (VIX) rising,weareeliminatingour5.0%positionintheBMO S&P 500 Index ETF (ZSP),infavouroftheBMO U.S. Low Volatility ETF (ZLU).

• Webelieveoilpricescanfallfurtherfromcurrentlevels.However,themajorityofthedropinBrentpriceshaslikelyalreadyoccurred.Although,itisdifficulttodeterminehowlongoilpricescouldremaindepressed,itshouldalsobenotedthatthecurrentpriceofcrudeistradingatanotablediscounttoits10-yearaverage.Aspreviouslymentioned,atacticalpositionintheBMO S&P/TSX Equal Weight Oil & Gas Index ETF (ZEO)canbeusedtogainexposuretolargecapenergyrelatedcompanies.ThecompaniesintheETFareCanadian,whichtendtobehighercostproducersandhaveahigherbetatooil,potentiallyoutperformingifandwhenoilpricesbouncebacktohigherlevels.Moreover,therecentdeclineintheCanadianenergysectorhasmadeyieldsmoreattractivewiththecurrentportfolioyieldofZEOat4.0%.

Non-Traditional:

• Althoughwearecurrentlyleavingthedurationriskoftheinvestmentgradeportionofourportfoliostrategyunchanged,wearereducingthedurationriskofourhighyieldexposure.Withthehighyieldcreditspreadtrendingwiderinthelasthalfyear,webelievestrongerU.S.economicdatawilleventuallyleadthistrendtoreverse.TomaintainourexposuretoU.S.highyieldbonds,whileeliminatingourdurationexposure,weareswitchingour3.5%positionintheBMO High Yield U.S. Corporate Bond Hedged to C$ Index ETF (ZHY)fortheBMO Floating Rate High Yield ETF (ZFH).

Sell/Trim Ticker (%) Buy/Add Ticker (%)

BMO S&P/TSX Equal Weight Industrials Index ETF ZIN 5.0% BMO S&P/TSX Equal Weight Oil & Gas Index ETF ZEO 3.0%

BMO Canadian Dividend ETF ZDV 4.0% BMO International Dividend ETF ZDI 6.0%

BMO S&P 500 Index ETF ZSP 5.0% BMO U.S. Low Volatility U.S. Equity ETF ZLU 5.0%

BMO High Yield U.S. Corporate Bond Hedged to C$ Index ETF ZHY 3.5% BMO Floating Rate High Yield ETF ZFH 3.5%

Total 17.5% Total 17.5%

Portfolio Strategy Report – First Quarter 2015 4

Ticker ETF Name Position Price MER Weight (%)

90-Day Vol

Volatility Contribution

Yield (%)*

Yield/Vol

Fixed Income

ZDB BMO DISCOUNT BOND INDEX ETF Debt Core $15.78 0.20% 14.0% 3.7 4.9% 2.5% 0.69

ZIC BMO MID-TERM U.S. IG CORPORATE BOND INDEX ETF Debt Tactical $17.12 0.25% 10.0% 8.5 8.2% 3.4% 0.39

ZCS BMO SHORT CORPORATE BOND INDEX ETF Debt Tactical $14.78 0.12% 9.0% 2.4 2.1% 2.0% 0.83

ZST BMO ULTRA SHORT-TERM BOND INDEX ETF Debt Tactical $56.26 0.15% 3.0% 2.0 0.6% 2.0% 1.01

Total Fixed Income 36.0% 15.8%

Equities

ZLB BMO LOW VOLATILITY CANADIAN EQUITY ETF Equity Core $25.35 0.35% 8.5% 10.7 8.8% 2.9% 0.27

ZDV BMO CANADIAN DIVIDEND ETF Equity Core $17.01 0.35% 5.0% 15.8 7.6% 4.6% 0.29

ZLU BMO LOW VOLATILITY U.S. EQUITY ETF Equity Core $24.04 0.10% 5.0% 12.7 6.1% 2.0% 0.16

ZDY BMO U.S. DIVIDEND ETF Equity Core $21.78 0.30% 11.0% 13.1 13.8% 3.8% 0.29

ZDI BMO INTERNATIONAL DIVIDEND ETF Equity Core $19.35 0.40% 6.0% 15.4 8.9% 4.2% 0.27

ZEQ BMO MSCI EUROPE HIGH QUALITY HEDGED TO CAD ETF Equity Tactical $16.31 0.40% 7.0% 16.1 10.8% 3.3% 0.21

ZWB BMO COVERED CALL BANKS ETF Equity Tactical $16.38 0.65% 3.0% 13.3 3.8% 6.0% 0.45

ZEO BMO S&P/TSX EQUAL WEIGHT OIL & GAS INDEX ETF Equity Tactical $12.26 0.55% 3.0% 33.6 9.7% 2.3% 0.07

ZWA BMO COVERED CALL DOW JONES INDUSTRIAL AVERAGE HEDGED TO C$ ETF Equity Tactical $19.87 0.65% 3.0% 12.2 3.5% 6.2% 0.51

ZUB BMO Equal Weight U.S. Banks Hedged to C$ ETF Equity Tactical $20.02 0.35% 4.0% 19.1 7.4% 1.6% 0.08Total Equity 55.5% 80.5%

Non-Traditional/Hybrids

ZFH BMO FLOATING RATE HIGH YIELD ETF Equity Tactical $14.91 0.40% 3.5% 7.1 2.4% 5.0% 0.71

ZPR BMO S&P/TSX LADDERED PREFERRED INDEX ETF Debt Tactical $13.93 0.45% 5.0% 2.6 1.2% 4.8% 1.86

Total Alternatives 8.5% 3.6%

Total Cash 0.0% 1.2 0.0% 1.0%

Portfolio 0.31% 100.0% 10.4 100.0% 3.3% 0.90

Ticker Top Holdings Weight

ZDB BMO DISCOUNT BOND INDEX ETF 14.0%

ZDY BMO U.S. DIVIDEND ETF 11.0%

ZIC BMO MID-TERM U.S. IG CORPORATE BOND INDEX ETF 10.0%

ZCS BMO SHORT CORPORATE BOND INDEX ETF 9.0%

ZLB BMO LOW VOLATILITY CANADIAN EQUITY ETF 8.5%

ZEQ BMO MSCI EUROPE HIGH QUALITY HEDGED TO CAD ETF 7.0%

ZDI BMO INTERNATIONAL DIVIDEND ETF 6.0%

ZDV BMO CANADIAN DIVIDEND ETF 5.0%

ZLU BMO LOW VOLATILITY U.S. EQUITY ETF 5.0%

ZPR BMO S&P/TSX LADDERED PREFERRED INDEX ETF 5.0%

ZUB BMO EQUAL WEIGHT U.S. BANKS HEDGED TO C$ ETF 4.0%

ZFH BMO FLOATING RATE HIGH YIELD ETF 3.5%

ZST BMO ULTRA SHORT-TERM BOND INDEX ETF 3.0%

ZWB BMO COVERED CALL BANKS ETF 3.0%

ZEO BMO S&P/TSX EQUAL WEIGHT OIL & GAS INDEX ETF 3.0%

ZWA BMO COVERED CALL DOW JONES INDUSTRIAL AVER-AGE HEDGED TO C$ ETF

3.0%

Core 49.5%

Tactical 50.5%

Cash

Alternatives

Equities

Fixed Income

Stats and Portfolio Holdings

Investment Objective and Strategy: The strategy involves tactically allocating to multiple asset-classes and geographical areas to achieve long-term capital appreciation and total return by investing primarily in exchange traded funds (ETFs).

Non-Traditional (11.5%)

Equities (55.5%)

Fixed Income (33.0%)

*Yieldcalculationsforbondsisbasedonyieldtomaturity,whichincludescouponpaymentsandanycapitalgainorlossthattheinvestorwillrealizebyholdingthebondstomaturityandforequitiesitisbasedonthemostrecentannualizedincomereceiveddividedbythemarketvalueoftheinvestments.

**Cashisbasedoffthe3-quarterCanadianDealerOfferedRate(CDOR).

Portfolio Strategy Report – First Quarter 2015 5

Portfolio Characteristics

Financials 23.2%

Health Care 7.5%

Industrials 7.2%

Information Technology 4.9%

Materials 4.7%

Telecommunication Services 4.8%

Utilities 10.3%

Consumer Discretionary 10.3%

Consumer Staples 13.0%

Energy 14.1%

Canada 50.5%

United States 36.5%

Europe 11.9%

Asia 1.1%

Federal 13.6%

Provincial 11.7%

Investment Grade Corporate 71.3%

Non-Investment Grade Corporate 3.5%

Weighted Average Term 6.05

Weighted Average Duration 4.74

Weighted Average Coupon 3.4%

Weighted Average Current Yield 3.3%

Weighted Average Yield to Maturity 2.6%

Equity Sector Breakdown

Regional Breakdown (Overall Portfolio)

Fixed Income Breakdown

Utilities

Telecommunication Services

Materials

Information Technology

Industrials

Health Care

Financials

Energy

Consumer Staples

Consumer Discretionary

Cash

Emerging Markets

United States

Canada

WeightedAverageCurrentYield:Themarketvalueweightedaveragecoupondividedbytheweightedaveragemarketpriceofbonds.

WeightedAverageYieldtoMaturity:Themarketvalueweightedaverageyieldtomaturityincludesthecouponpaymentsandanycapitalgainorlossthattheinvestorwillrealizebyholdingthebondstomaturity.

WeightedAverageDuration:Themarketvalueweightedaveragedurationofunderlyingbondsdividedbytheweightedaveragemarketpriceoftheunderlyingbonds.Durationisameasureofthesensitivityofthepriceofafixedincomeinvestmenttoachangeininterestrates.

*Regional Breakdown includes equities, fixed income and alternative sleeves.

Portfolio Strategy Report – First Quarter 2015 6

The Good, the Bad, and the Ugly

Conclusion: Weexpectadivergingeconomiclandscapetomaterializeasthevaryingpaceofrecoverybetweenmajorregionswillbecomeincreasinglyprevalent.Themonetarypolicyofkeycentralbankswillbecomeunevenasaresult,leadingtogreateropportunitiesinassetallocation.Theseconditionswillbebeneficialformulti-assetstrategiesandportfoliosutilizingtargetedstylesandfactorexposures.Ourongoingconcernremainstheexcessleverageinthefinancialmarkets.TheNYSEMarginDebtIndex,whichweoftenquoteinthisreport,hasnowtrendedbelowits12-monthaverage.Shoulditsignificantlybreakbelowthisaverage,adeleveragingprocesscouldoccur,wherecurrentmarginlevelsexceedpre-2008levels.Consequently,ourequityexposure,particularlyintheU.S.hasnowbecomemoredefensivelypositioned.

Global-Macro/Geo-Political Fundamental Technical

Good

• U.S.initialjoblessclaimcontinuestotrendlower.Itscurrentlevelsarelowsnotseensincepre-recession.

• TheU.S.unemploymentratealsocontinuestotickdownfromitshighof9.93%in2009toitscurrent 5.7%.

• TheUniversityofMichiganConsumerSentimentIndexhasgainedto93.6,apost-recessionhigh.

• LeadingEconomicIndicator(LEI)acombinationof10economicdatapoints,showstheEuroareagaining momentum.

• ThenewhighsoftheS&P500CompositeIndex havebeenmetwithhigherearningspershare(EPS).

• The12.9xcurrentprice-to-earnings(P/E)oftheS&P500EnergyIndexis28.7%discounttothebroad S&P500CompositeIndex.

• MoreaccommodativemonetarypolicyfromthecentralbanksofAsiaPacificcouldbesupportiveforthedividendpayingcompaniesoftheregion.

• LowerenergypricescouldbetherequiredcatalysttoEuropeanequitieswhichhaveagoodrepresentationtoconsumerrelatesectors.

• Wecontinuetoexpectcorrelationsbetweenandwithinassetclassestodriftlower.Thisisapositiveformulti-assetstrategies.

• Onarelativebasis,goldhassurgedversusoilprices.

Bad

• IndustrialProductioninareasoutsideoftheU.S.areshowingweakness.ChinaandsomemajorEuropeaneconomiesareloweryearoveryeargrowthandBrazilandRussiawerenegative.

• TheslumpincrudepriceswillputpressureontheGDPofoilexportingcountries,whichmaytrickleintootherareasoftheglobaleconomy.

• Eurozoney/yCPI(allitems)hasgonenegative.

• ChinaExporttrade(y/y)havestabilizedbutremainwellbelowpre-recessionlows.

• Valuationsondefensiveorientedsectorssuchasutilities and telecoms continue to trade richer.

• TheCBOE/S&PImpliedVolatilityIndex(VIX) has spikedabove20(itslong-termaverage)threetimes in the last quarter.

• ThemorespeculativeCSI300ShanghaiShenzhenIndex has surged relative to the Shanghai CompositeIndex.Thispotentiallyindicatesahighdegreeofspeculativeinvesting.

Ugly

• WecontinuetobeconcernedabouthighhouseholddebtlevelsinCanada.Loweroilpricescouldnegativelyimpactotherpartsoftheeconomy,puttingpressureonconsumers.

• IndustrialproductioninJapan(y/y)registereda-3.8% in its last reading.

• TheRussianequitymarkethasacurrentP/Eof4.4x.Althoughinexpensive,loweroilpricescouldplacefurtherheadwindsonitsmarket.

• TheMargin Debt Indexlooksdangerouslyclosetocrossingbelowits12-monthaverage.Asignificantbreachbelowwouldtriggeramajordeleveraging event.

• TheS&P/TSXCompositeIndex has registered lowerhighsandlowerlows.

• CommodityrelatedcurrenciessuchastheCanadiandollar,NorwegianKronaandtheAustralian dollar have flat-lined relative to the U.S.dollar.Loweroilpricescouldcauseinterestratestodiverge,puttingfurtherdownwardpressureoverthelong-term.

”S&P®” and “S&P 500®” are trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and “TSX” is a trademark of TSX Inc. These trademarks have been licensed for use by S&P Dow Jones Indices LLC and sublicensed to BMO Asset Management Inc. in connection with ZSP, ZIN and ZPR. ZSP, ZIN and ZPR are not sponsored, endorsed, sold or promoted by S&P Dow Jones LLC, S&P, TSX, or their respective affiliates and S&P Dow Jones Indices LLC, S&P, TSX and their affiliates make no representation regarding the advisability of trading or investing in such ETFs.

The Dow Jones Industrial Average Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by the BMO Asset Management Inc. Dow Jones®, Dow Jones Industrial Average®, and DJIA® are registered trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”), and have been licensed to S&P Dow Jones Indices LLC and and sublicensed for use by BMO Asset Management Inc. in connection with ZWA. ZWA is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or their respective affiliates, and S&P Dow Jones Indices LLC, Dow Jones and their respective affiliates make no representation regarding the advisability of trading or investing in such ETF.

The exchange traded funds referred to herein are not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to any such exchange traded funds or any index on which such exchange traded funds are based. The prospectus contains more detailed description of the limited relationship MSCI has with BMO Asset Management Inc. and any related exchanged traded fund.

This communication is intended for informational purposes only and is not, and should not be construed as, investment and/or tax advice to any individual. Particular investments and/or trading strategies should be evaluated relative to each individual’s circumstances. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment.

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

Commissions, management fees and expenses all may be associated with investments in exchange traded funds. The indicated rates of return are the historical annual compound total returns including changes in prices and reinvestment of all distributions and do not take into account commission charges or income taxes payable by any unitholder that would have reduced returns. Please read the prospectus before investing. Exchange traded funds are not guaranteed, their value change frequently and past performance may not be repeated.

® “BMO (M-bar roundel symbol)” is registered trade-mark of Bank of Montreal, used under licence.

Visit bmo.com/etfs or contact Client Services at 1-800-361-1392.

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