PA ESG Event - cdn.eventscase.com

BMO Responsible UK Income Fund

Information as of May 31, 2021(unless otherwise indicated)

1343160 – UK

For professional / qualified investors only

PA ESG EventJuly 2021

Classification: only to be shown if not public

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Investment biography

Patrick NewensDirector, Portfolio Manager, Global Small Cap

Patrick is a Director and Portfolio Manager in the Global Small Cap Equity team. Patrick joined the firmin 2004 as a member of the Strategy team. Prior to this, Patrick worked as a consultant with Deloitte,specialising in Capital Markets. Patrick graduated from the University of Nottingham in 2001 with a BA(Hons) in Economics. He holds the IMC qualification and is a CFA charterholder.

Classification: only to be shown if not publicResponsible UK Equity Overview

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Long-term approach enabled by stability of 7-member team based in London. Highly collaborative team based ethos.

100+ years combined experience.

Focus on quality, growth companies that are demonstrating a clear commitment to sustainability.

We are clear in what constitutes a quality business, disciplined in our approach to valuation & long term in our perspective. We consider risk throughout the process.

Engagement is an integral part of our investment philosophy. By encouraging better practices we aim to reduce risk & support performance.

Portfolio Management Team

Idea generation, research & portfolio

construction

Active ownership

Experienced

Disciplined

Responsible Investment Advisory Council

Input on ethical& ESG criteria

Responsible Investment TeamScreening, in-depth

ESG research & active ownership

Responsible investment is a core competency

A+ RatedBy UN Principle for Responsible

Investment2£8.7bn

Total AUM in Responsible Funds as of 31 May 20211

1984Since 20+

Responsible Investment

experts

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1. Source: BMO Global Asset Management as at 31-May-21. 2. For strategy & governance3. Best ESG Research Team by Investment Week (joint winner). https://event.investmentweek.co.uk/sustainableesginvestmentawards2020/en/page/2020-winners

Responsible approach


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How we work

• Sell-side recommendations

• Trend and momentum investing

• Highly speculativesituations

• Macro bets

• Benchmark hugging

We avoid

• Delivering consistent performance

• Assessment of quality and value

• Managementmeetings

• Team approach

• Minimising downside risk

• Long-term mindset

We focus on

Bottom-up, stock picking,bias to quality approach

Focused portfolio of long-term investments

7 strong team of investment professionals

>>

Classification: only to be shown if not publicScreening: Acting with integrity through our investment process

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Idea generation

Company analysis

Portfolio construction

Portfolio active

management & Reporting

Screening

Responsible and sustainability criteriacreates an Acceptable Universe

Note that this is not an exhaustive list of screens. Full details of Responsible Investment criteria and thresholds used are available at www.bmogam.com

Product-based Conduct-based

• Alcohol • Fossil Fuel extraction & reserves• Gambling• Nuclear power generation• Pornography• Tobacco• Weapons

• Environment• Arctic and ecologically-sensitive

operations• Environmental management

• Social• Animal welfare• Health and safety• Human rights and oppressive regimes• Labour standards

• Governance• Business ethics

Classification: only to be shown if not publicIncome considerations

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Largest contributors to FTSE All-Share yield

Source: BMO Global Asset Management, as at 31-May-21. FTSE International Limited (“FTSE”) © FTSE 2021. This is based on historic dividends. * SMID: Small/mid cap stocks.

Past performance is not indicative of future performance

• The top 20 historic yield contributors accounted for >50% All Share yield

• Responsible process means a number of these high yielding stocks are excluded from our universe (grey bars in the chart)

• Also some large sectors, generally found in Income funds, are effectively missing such as Oils & Tobaccos

• This leads us to being overweight SMID* & explains our sector allocation

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Classification: only to be shown if not publicCompany analysis

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Idea generation

Company analysis

Portfolio construction

Portfolio active


Screening

We’re clear in what we believe constitutes a quality company and there are key areas we look to assess

Source: BMO Global Asset Management.

• Well articulated model• Competitive advantages• Free cash flow generative• Pricing power / scale• Favourable industry structure / conditions• Financial strength• Diversified customer /supplier/product set• ESG and Sustainability

• Capable operators• Rational• Good capital allocators• Aligned interests• Prudent• Transparent with shareholders

• Trends in metrics important

• Range of valuation measures used

• Repeatability of returns• Conviction in value

appreciation

High quality business

Attractive price

Strong management

Classification: only to be shown if not publicPortfolio and active engagement

Idea generation Screening Company

analysisPortfolio construction

We believe in the power of active ownership.

Our aim is to reduce risk, enhance long-term performance and encourage a positive contribution to broader environmental, social and governance issues

Portfolio active


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Source: BMO Global Asset Management as at 31-Mar-21. ESG = Environmental, Social and Governance. For illustrative purposes only. This does not constitute a recommendation to buy or sell any particular security.

EnvironmentGuidance on best practices in TCFD

disclosure

SocialPayment of supply chain

worker wages after cancelled orders due to

Covid-19

GovernanceReducing pension

contribution for executive directors


• Responsible Investment team engaged with 73 companies held in the fund which is approximately 74% of fund weight

BMO Responsible UK Equity Fund

• Responsible Investment team engaged with 54 companies in the fund which is approximately 80% of fund weight

Effective engagement requires:

A deep understanding of how ESG issues impact mainstream business strategy

Local knowledge and context

The building of long-term relationships with

companies

Access to senior management

and Board

Engagement: 12 months to 31 March 2021


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The BMO Responsible UK Income Fund aims to deliver above average income with capital growth potential through investment in a portfolio of screened UK companies*. The Fund may also include exposure to screened corporate bonds to assist in meeting its income target.

Fund Name

Fund Objective

Awards / Ratings:

Source: BMO Global Asset Management, as at 31-May-21. Figures subject to rounding* Companies are mainly listed in the UK

Our Responsible UK Income Fund at a glance

Detail Fund specifics

Launch date 13-Oct-1987

Fund Size £444.7m

Strategy Size £763.9m

Number of holdings approx. 55-70

Ex–ante tracking error range 3-9%

Benchmark FTSE All-Share

Min-Max stock weight guidelines 0.75%-10%

Management fee 0.75%

ISIN GB0033396481


27%

22%10%

9%

7%

7%

6%

4%

4%1%

Financials (27.2%)Industrials (22.1%)Health Care (10.2%)Consumer Staples (8.9%)Real Estate (7.5%)Consumer Discretionary (7.1%)Utilities (6.2%)Telecommunications (4.3%)Technology (4.2%)Basic Materials (0.8%)

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Sector allocation % (absolute holding) Sector allocation % (relative to benchmark)

Source: BMO Global Asset Management as at 31-May-21. Benchmark: FTSE All-Share Index. FTSE International Limited (“FTSE”) © FTSE 2021. Figures subject to rounding.

Sector profile for Responsible UK Income Fund

-10.0 0.0 10.0 20.0

CashBasic Materials

EnergyConsumer Staples

Consumer DiscretionaryHealth Care

TelecommunicationsTechnology

UtilitiesFinancials

Real EstateIndustrials


Top 10 – Absolute holdings Yield % Portfolio weight %

Unilever 3.5 5.0

AstraZeneca 2.5 4.8

Intermediate Capital Group 2.5 4.7

GlaxoSmithKline 6.0 4.0

Responsible Bonds 2.9 3.7

HSBC Holdings 0.0 3.5

Legal & General Group 6.2 2.9

National Grid 5.4 2.6

Vodafone Group 6.1 2.4

Experian 1.2 2.2

Total 35.7

Top 5 – relative holdings Portfolioweight %

Benchmark weight % Difference %

Intermediate Capital Group 4.9 0.2 4.7

Legal & General Group 3.0 0.7 2.3

Sirius Real Estate 2.3 0.0 2.2

Computacenter 2.2 0.1 2.1

Phoenix Group Holdings 2.1 0.2 2.0

Bottom 5 –relative holdings Portfolio weight %

Benchmark weight % Difference %

Royal Dutch Shell 0.0 4.3 -4.3

Diageo 0.0 3.3 -3.3

Rio Tinto 0.0 2.8 -2.8

British American Tobacco 0.0 2.6 -2.6

BP 0.0 2.6 -2.6

Responsible UK Income Fund - Top 10 and weightings

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Source: BMO Global Asset Management as at 31-May-21 Benchmark: FTSE All-Share Index. FTSE International Limited (“FTSE”) © FTSE 2021. Figures subject to rounding.


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• As a provider of specialist social care and education to vulnerable people, very positive contributor to society

• Caretech take a community based approach

• Quality ratings for their facilities best in the industry - over 90% Good or Outstanding

• Rising number of adults and children need care

• Independent sector prevalent and increasing share

• Social care critical to NHS system

• Fragmented sector – opportunity to consolidate


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• Provider of broadband, mobile, energy and insurance services under Utility Warehouse brand

• Attractive offer of fair long term pricing• Network selling model offers an

opportunity for Partners to build a long term recurring income stream

• UK’s only integrated multiservice provider – operating costs spread across several services

• Capex light model leads to good cash generation

• More favourable competitive environment in energy

• Partner productivity recovery from COVID period

• Opportunity to sell additional services to customer base


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• Supplier and provider of ingredients and solutions for the food, beverages and industrial markets

• Emphasis shifting towards provision of new and more specialised ingredients into broader food and beverage end markets

• Historically some volatility in profitability around commodity market movements and soft drink industry pricing rounds

• Working closely with customers to reduce use of sugar and calorific content of products

• Examining possible sale into a joint venture of the Primary Products division

• Strong balance sheet position provides options for corporate activity

• Reducing its carbon emissions and water use


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BUY/ ADD SELL/REDUCE

Source: BMO Global Asset Management as at 31-May-21. For illustration purposes only. This does not constitute a recommendation to buy or sell any particular security.

Responsible UK Income Fund - Key trades

12 months to May 2021


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“We believe our responsible approach

can enhance returns and reduce risks for

our clients”

Catherine StanleyManaging Director

• We focus on quality, growth companies that are demonstrating a clear commitment to sustainability

• We are long-term, stock-picking investors with a high active share

• Engagement is an integral part of our investment philosophy

A quality approach to responsible investing


Questions?

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Classification: only to be shown if not publicDisclaimer

For professional investors only

This financial promotion is issued for marketing and information purposes only by BMO Global Asset Management in the UK.

The Fund is a sub fund of BMO Investment Funds (UK) ICVC V, an open ended investment company (OEIC), registered in the UK and authorised by the Financial Conduct Authority (FCA).

English language copies of the Fund's Prospectus and English language copies of the key investor information document (KIID) can be obtained from BMO Global Asset Management, Exchange House, Primrose Street, London EC2A 2NY, telephone: Client Services on 0044 (0)20 7011 4444, email: [email protected] or electronically at www.bmogam.com. Please read the Prospectus before taking any investment decision.

Not all fund share classes are available for investment in certain countries.

The information provided in the marketing material does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell or otherwise transact in the Funds.

FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE

nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

©2021 BMO Global Asset Management. Financial promotions are issued for marketing and information purposes; in the United Kingdom by BMO Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority; in the EU by BMO Asset Management Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); and in Switzerland by BMO Global Asset Management (Swiss) GmbH, which is authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). Telephone calls may be recorded.

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©2021 BMO Global Asset Management. Financial promotions are issued for marketing and information purposes; in the United Kingdom by BMO Asset Management Limited, which is authorised and regulated by the Financial ConductAuthority; in the EU by BMO Asset Management Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); and in Switzerland by BMO Global Asset Management (Swiss) GmbH acting as representativeoffices of BMO Asset Management Limited in Switzerland, which are authorised by FINMA. Telephone calls may be recorded.

Investing to make a positive difference

• Part of BMO Financial Group, 8th largest bank in North America by assets

• 1,200 employees in 20 key locations across the globe

• 354 investment professionals

• Managing £200bn+ in assets

• Responsible about investment

• A+ rated (for Strategy & Governance) – United Nations Principles for Responsible Investment

• 30+ years of providing ESG solutionsAs at 31 December 2019

Here to support you

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BMO Global Asset Management (EMEA) Exchange HousePrimrose StreetLondon EC2A 2NYTel: +44 (0) 20 7628 8000Calls may be recorded.

bmogam.com

PA ESG Event - cdn.eventscase.com

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