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Active investing at passive pricing

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Introducing the BMO Universal MAP Range

Launched in late 2017, the BMO Universal MAP Range brought something new to the funds marketplace. It launched a suite of actively managed risk-targeted options that, with an Ongoing Charge Figure capped at 29 basis points, came at a price usually associated with passive investing.

In many ways, today’s investors are in a better position than their predecessors. They have greater choice in terms of asset types, product providers and funds. Investing is easier thanks to technology, meaning you can select, monitor and adjust your portfolio, often instantly. It’s also increasingly cost-effective, with competition leading to a real downward trend in the prices associated with investment. Lower costs mean less of a drag on returns and provide greater scope for investors to achieve the outcomes they are looking for.
Nonetheless, it remains the case that the value of investments can go down as well as up and investors may not get back the original amount invested.

Proven principles

Despite these changes, many of the principles associated with sensible investing are as applicable today as they have been in the past. Three of the most important principles are:

  • Diversification – spreading your portfolio across a range of investments
  • Long-term thinking – riding out shorter-term challenges and fluctuations
  • Consider valuation – remembering that the price you pay for an asset is a key determinant of its long-term potential.

The push to passive

It’s unsurprising, therefore, that many of today’s more popular investment options emphasise the benefits of diversification alongside the advantages of lower costs.  Passive strategies have proliferated, with individuals now able to access portfolios investing across a host of asset classes in a cost-effective manner through products like Exchange Traded Funds.

Active benefits

Whilst benefitting from lower costs , those choosing to allocate to passively managed strategies are forgoing the potential benefits associated with active management. The advantages of active investing are multi-faceted in nature. They include:

  • Asset allocation – making active adjustments to a portfolio’s overall asset mix to reflect economic and market conditions. For example, if the economy is growing, a greater emphasis on equities may be sensible, whereas in more challenging conditions it may be prudent to favour the more resilient characteristics of fixed income. Exposure to individual countries can also be adjusted to reflect geographic differentials between regions and countries.
  • Tactical moves – alongside strategic asset allocation, it does make sense to think tactically too – taking advantage of more time sensitive opportunities and navigating near-term risks. Markets can move fast so a tactical overlay has scope to add real value.
  • Stock picking – the way components – such as individual equities or bonds – are selected can have a big impact as the difference between the winners and losers can be stark. In January 2018 for example, Carillion plc became the largest ever trading liquidation in the UK – bad news for its employees, customers and shareholders.  If outperformance is the desired outcome, then doesn’t it make sense to invest based on detailed company analysis rather than passively mirroring the composition of a stock market index?
  • Risk management – any investment involves a degree of risk, so assessing and managing this is a big part of any active strategy. A market may be looking expensive, for example, so taking steps to protect the portfolio may be prudent.

BMO Universal MAP funds an active solution at a passive price point

With these factors in mind,  we developed the BMO Universal MAP Range, launching the funds in late 2017. We recognised the desire for a well-diversified portfolio building block at an attractive price but felt that cost considerations were leading individuals down a wholly passive route, which in turn meant forgoing the potential benefits of active management.

The range is built on firm foundations – we’ve been managing multi-asset portfolios for many years and used a proven multi-asset platform together with our other specialist capabilities to deliver a suite of actively managed funds at a price point typically associated with passive funds. For investors seeking attractive long-term returns and an investment aligned with their attitude to risk, the BMO Universal MAP funds offered a new and unique option.

Teamwork – the BMO Universal MAP funds are managed by the BMO Multi-Asset team. Based in London, Chicago and Toronto, the 20+ strong team manage over £30bn for institutions and individuals. As well as its own experience (an average of 21 years in the industry), the team draws on insights and expertise from across its other specialist capabilities.

A good start

2018 was an eventful and challenging year for markets and the team managed to add value through strategic asset allocation, tactical adjustments and bottom-up stock selection. Although the funds are little over a year old, we are pleased with how they have performed so far relative to their peers (the IA Volatility Managed). 

Past performance should not be seen as an indicator of future performance.

BMO Universal MAP Funds: performance in context

Performance against key indices and the IA Managed Volatility sector for comparative purposes

  Rank out of 115 funds Since inception Rank out of 115 funds 2018
BMO Universal MAP Growth C Acc 1 0.68% 1 -0.49%
BMO Universal MAP Balanced C Acc 2 0.44% 2 -0.67%
BMO Universal MAP Cautious C Acc 3 0.26% 3 -0.85%
FTSE All World - -2.37% - -3.44%
FTSE All Share - -6.07% - -9.47%

Source: LIM, net of fees in sterling as at 31-Dec-18.

Past performance should not be seen as an indicator of future performance.

About BMO Global Asset Management

We’re a worldwide asset manager with more than 20 offices in 14 countries. We are part of the BMO Financial Group that, with over 900 branches across Canada, is a household name. Having officially started doing business in November 1817, BMO was Canada’s first bank and its pioneering status is reflected in its official Canadian bank number, 001. In the 200+ years following its creation, BMO has grown to service the needs of over twelve million customers worldwide.

Did you know? BMO paid its first dividend in 1829 and hasn’t missed a payment since. At 190 years, this is the longest-running dividend pay-out for any Canadian company and means that cash has been returned to shareholders through major crises including World War I, the Great Depression, World War II and the 2008 financial crisis.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any products that may be mentioned.




At BMO, our aim is to help our clients overcome the challenges they face and deliver the investment outcomes they seek. We've been helping clients with their financial needs for over 200 years.

A lot has happened since 1817, including the launch of the of the world's oldest collective investment fund vehicle - F&C Investment Trust over 150 years ago. This fund made investing more accessible to individual investors and we are proud to still manage it today.

We currently manage 10 Investment Trusts, providing a range of investment opportunities including access to equities, bonds, property and private equity. Each trust has different aims and objectives with the option of capital growth, income or a combination of the two and with a specific regional focus or with a global remit.

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