BMO Insurance today introduced BMO Guaranteed Investment Funds (GIFs) - segregated funds which are designed to help Canadians reach their retirement saving goals while protecting their hard-earned dollars.
The funds are an ideal choice for pre-retirees and retirees who seek to accumulate wealth for retirement by investing in the market while benefitting from deposit guarantees which provide market downside protection. Deposit guarantees are effective on a future "maturity date" selected by the client (15 to 25 years) or on the death of the annuitant.
"We’ve introduced these new funds for investors who are looking to invest in the market to meet their retirement saving goals while limiting their investment risk," said Peter McCarthy, President & CEO, BMO Insurance. "They’re a reflection of our ongoing commitment to meeting the diverse needs of investors and broadening the range of wealth management services available to them."
BMO GIFs have key differentiating features that together make them unlike other segregated funds existing in the market. In addition to guarantees on the principal of up to 100 per cent upon maturity and death, the client’s "maturity guarantee amount" is reset automatically every month, which can increase the amount payable upon the maturity date.1 This feature effectively locks in the client’s market gains for the future.
The five new BMO GIFs include both balanced exchange traded funds (ETFs) and money market investment options. These include:
Canadian Balanced Growth Fund
U.S. Balanced Growth Fund
Canadian Income Strategy Fund
North American Income Strategy Fund
Money Market Fund
For portfolio management, BMO Insurance partnered with BMO Asset Management, one of Canada’s leading and fastest growing issuers of ETFs with over $11 billion in ETF managed assets. The Canadian and U.S. Balanced Growth Funds offer broad exposure to S&P/TSX or S&P500 stock markets. The Canadian and North American Income Strategy Funds invest in Canadian or both Canadian and U.S. income-generating securities – including dividend-paying common stocks, preferred shares and income trusts.
All funds are balanced with high-quality Canadian fixed income securities or cash equivalents. The value-added is BMO Volatility Control™ – a systematic asset allocation strategy designed to even out the volatility of fund returns, which reduces equity exposure and increases fixed income holdings during periods of above average market volatility.
Other valuable benefits of these segregated funds include potential creditor protection and the ability to bypass probate so the death benefit proceeds can be quickly and cost-efficiently paid directly to a named beneficiary instead of your estate.2 3
BMO Life Assurance Company is the sole issuer and guarantor of the BMO GIF individual variable insurance contract. Any amount that is allocated to a segregated fund is invested at the risk of the policy owner and may increase or decrease in value.