Form 497 COLUMBIA FUNDS SERIES

October 6, 2021 6:05 AM EDT

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Filed pursuant to Rule 497(b)
File No. 333-258916

BMO FUNDS, INC.

BMO LGM Emerging Markets Equity Fund

BMO Mid-Cap Growth Fund

BMO Core Plus Bond Fund

BMO Corporate Income Fund

BMO Intermediate Tax-Free Fund

BMO Strategic Income Fund

790 North Water Street, Suite 1100

Milwaukee, Wisconsin 53202

1-800-236-FUND

(1-800-236-3863)

www.bmofunds.com

October 5, 2021

Dear Shareholder:

I am writing to inform you that a joint special meeting of shareholders of the BMO Funds, Inc. (the “Target Company”) will be held at 9:00 a.m., local time, on November 8, 2021, at the Target Company’s principal executive offices at 790 North Water Street, Suite 1100, Milwaukee, Wisconsin 53202. The purpose of the meeting is to ask shareholders to:

 

1.

Consider and vote on proposals to reorganize each of BMO LGM Emerging Markets Equity Fund, BMO Mid-Cap Growth Fund, BMO Core Plus Bond Fund, BMO Corporate Income Fund, BMO Intermediate Tax-Free Fund and BMO Strategic Income Fund (each, a “Target Fund” and together, the “Target Funds”), each a series of the Target Company, into a corresponding series of the Columbia Funds Series Trust I (each, an “Acquiring Fund” and together, the “Acquiring Funds”) managed by Columbia Management Investment Advisers, LLC (“Columbia”) and to amend the Articles of Incorporation of the Target Company to dissolve and terminate the Target Fund (each, a “Reorganization Proposal” and together, the “Reorganization Proposals”);

 

2.

(BMO Mid-Cap Growth Fund only) Consider and vote on a proposal to approve a new investment advisory agreement between the Target Company, with respect to BMO Mid-Cap Growth Fund, and Columbia (the “Investment Advisory Agreement Proposal”), which would only take effect if deemed necessary to ensure the continuous portfolio management of BMO Mid-Cap Growth Fund prior to the close of the Fund’s reorganization; and

 

3.

(BMO LGM Emerging Markets Equity Fund only) Consider and vote on a proposal to approve a new investment subadvisory agreement between BMO Asset Management Corp. (“BMO AM”) and LGM Investments Limited, with respect to BMO LGM Emerging Markets Equity Fund (the “Subadvisory Agreement Proposal”).

If you are a shareholder of record of a Target Fund as of the close of business on August 31, 2021, you have the opportunity to vote on the Reorganization Proposal affecting your Target Fund and, if applicable, the Advisory Agreement Proposal or Subadvisory Agreement Proposal. The Reorganization Proposals, the Investment Advisory Agreement Proposal and the Subadvisory Agreement Proposal are referred to together as the “Proposals” and each, a “Proposal.” This package contains information about the Proposals and the materials to use when casting your vote. If a Reorganization Proposal is approved by a Target Fund’s shareholders and the other conditions to the reorganization are satisfied or waived on the effective date of the reorganization, the Target Fund’s shareholders will be issued shares of the corresponding Acquiring Fund that are equal in aggregate net asset value to the shares of the Target Fund that those shareholders held immediately prior to the effective time of the reorganization.


The Proposals have been recommended by BMO AM, the investment adviser to the Target Funds, and the Proposals have been carefully reviewed and approved by the Board of Directors of the Target Company (the “BMO Funds Board”). Based on its review, the BMO Funds Board recommends that you vote “FOR” the Proposal(s) for your Target Fund. More information on the specific details of, and reasons for, the Proposals is contained in the enclosed Combined Proxy Statement/Prospectus.

Please read the enclosed materials carefully and cast your vote on the proxy card. Your vote is extremely important, no matter how large or small your holdings may be.

Voting is quick and easy. To cast your vote, simply complete the proxy card enclosed in this package. Be sure to sign the card before mailing it in the postage-paid envelope. You may also vote your shares by touch-tone telephone. Simply call the toll-free number on your proxy card, enter the control number found on the card, and follow the recorded instructions. You may also vote your shares by Internet. Simply go to the website indicated on your proxy card, enter the control number found on the front of your proxy card, and follow the instructions to cast your vote. You may receive a call from our proxy solicitor, Broadridge Financial Solutions, Inc., reminding you to vote.

If you have any questions before you vote, please call our proxy solicitor at 888-991-1289. Thank you for your participation in this important initiative.

Sincerely,

John M. Blaser, President

BMO Funds, Inc.


QUESTIONS & ANSWERS

This is a brief overview of the Proposals to be considered by shareholders of BMO LGM Emerging Markets Equity Fund, (ii) BMO Mid-Cap Growth Fund, (iii) BMO Core Plus Bond Fund, (iv) BMO Corporate Income Fund, (v) BMO Intermediate Tax-Free Fund and (vi) BMO Strategic Income Fund (each, a “Target Fund” and together, the “Target Funds”), each a series of BMO Funds, Inc. (the “Target Company”). We encourage you to read the full text of the enclosed Combined Proxy Statement/Prospectus to obtain detailed information with respect to the Proposal(s) for your Target Fund.

Reorganization Proposals

Q: What is a fund reorganization?

A fund reorganization involves one target fund transferring all of its assets to an acquiring fund in exchange for shares of such acquiring fund and the assumption by the acquiring fund of all identified liabilities and obligations of the target fund. Once completed, shareholders of the fund being reorganized (i.e., the target fund) will hold shares of the acquiring fund.

Q: What is the Reorganization Proposal for my Target Fund(s)?

As a shareholder of one or more of the Target Funds, you are being asked to vote on a reorganization involving your Target Fund (each, a “Reorganization” and together, the “Reorganizations”) into a corresponding series of the Columbia Funds Series Trust I (each, an “Acquiring Fund” and together, the “Acquiring Funds”) managed by Columbia Management Investment Advisers, LLC (“Columbia”). As proposed, each Target Fund would reorganize into an Acquiring Fund as set forth in the table below:

 

Target Fund

  

Acquiring Fund

BMO LGM Emerging Markets Equity Fund    Columbia Emerging Markets Fund
BMO Mid-Cap Growth Fund    Columbia Mid Cap Growth Fund
BMO Core Plus Bond Fund    Columbia Total Return Bond Fund
BMO Corporate Income Fund    Columbia Corporate Income Fund
BMO Intermediate Tax-Free Fund    Columbia Intermediate Municipal Bond Fund
BMO Strategic Income Fund    Columbia Strategic Income Fund

Q: Why are the Reorganizations being proposed?

Bank of Montreal, the parent of BMO Asset Management Corp. (“BMO AM”), reached a definitive agreement with Ameriprise Financial, Inc. (“Ameriprise”), the parent of Columbia, to sell the entities that represent its EMEA (Europe, the Middle East and Africa) asset management business (the “EMEA Purchase Agreement”). In addition, BMO AM and the Bank of Montreal (collectively, “BMO”) have determined to exit the mutual fund investment advisory business in the United States, including ceasing management of the Target Funds. The EMEA acquisition also establishes a strategic relationship between Ameriprise and BMO, giving BMO’s North American wealth management clients opportunities to access a range of Columbia Threadneedle Investments1 management solutions, including the Acquiring Funds. As a result, to ensure that shareholders of the Target Funds have continued access to a large and stable mutual fund platform, BMO AM has proposed reorganizing each of the Target Funds into an Acquiring Fund with an investment strategy that is similar to that of the Target Fund. Columbia or an affiliate will pay BMO an amount based on a percentage of the advisory fees previously paid by the Target Funds to BMO AM with respect to the assets transferred in the Reorganizations.

 

1 

Columbia Threadneedle Investments (“Columbia Threadneedle”) is the global brand name of the Columbia and Threadneedle group of companies.


Q: Will the portfolio managers of my fund change as a result of the Reorganizations?

Yes. Columbia is the investment manager of each Acquiring Fund, and the portfolio managers of the Acquiring Funds are different than the portfolio managers for each Target Fund. The portfolio managers of the Acquiring Funds will continue to manage the Acquiring Funds following the Reorganizations. However, the portfolio managers of BMO Mid-Cap Growth Fund may join Columbia prior to the Reorganization. In those cases, the portfolio managers of BMO Mid-Cap Growth Fund are expected to continue to serve as portfolio managers of the corresponding Acquiring Funds along with the existing portfolio managers of the Acquiring Funds.

Q: Will there be any changes to the options or services associated with my account as a result of the Reorganizations?

Yes. All services will be provided by the Acquiring Funds and their service providers following the Reorganizations. The account-level features and options such as dividend distributions, automatic investment plans, systematic withdrawals and dollar cost averaging currently offered by the Acquiring Funds are detailed in Section D of the enclosed Combined Proxy Statement/Prospectus. If you purchase shares through a broker-dealer or other financial intermediary, please contact your financial intermediary for additional details.

Q. What will happen to my current elections with respect to options or services associated with my account?

Your current elections with respect to the automatic investment plan, systematic withdrawal plan and dividend reinvestment plan, as well as your current bank instructions and beneficiary information will be automatically applied to your new account at Columbia for accounts held directly with the Fund. If you purchase shares through a broker-dealer or other financial intermediary, please contact your financial intermediary for additional details. If you are a non-U.S. shareholder of a Target Fund, as a shareholder of the combined fund you will not be eligible for additional share purchases, except related to dividend reinvestments.

Q. Will my purchase privileges be converted or do I need to re-enroll?

The majority of shareholders with net asset value purchase privileges and rights of accumulation will remain eligible following a Reorganization and no action will be required to maintain such purchase privileges. However, continued eligibility is subject to the requirements of the Acquiring Funds, which are detailed in Section D of the enclosed Combined Proxy Statement/Prospectus. If you purchase shares through a broker-dealer or other financial intermediary, please contact your financial intermediary for additional details.

Q: What are the costs of the Reorganizations?

You will not pay any sales charges in connection with receiving Acquiring Fund shares issued in the Reorganizations. Reorganization costs will be allocated among BMO AM, Columbia and their respective affiliates, whether or not such Reorganizations are consummated. Costs of the Reorganizations, which are estimated to be approximately $3.8 million, will not be borne by the Target Funds or Acquiring Funds.

Q: Will there be any costs associated with portfolio repositioning?

Yes. There will be repositioning costs in connection with some of the Reorganizations. BMO AM has agreed to bear brokerage and transaction fees arising from sales of portfolio assets by a Target Fund in anticipation of the Reorganization. A discussion of the anticipated capital gains impact of the portfolio repositioning by each Target Fund on an aggregate and per share basis is included under “Section A –Proposals 1-6: Reorganizations Proposals – Fees and Expenses” in the enclosed Combined Proxy Statement /Prospectus.

 

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Q: What are the U.S. federal income tax consequences of the Reorganizations?

Each Reorganization is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes. Accordingly, it is expected that Target Fund shareholders who receive shares of the corresponding Acquiring Fund in a Reorganization will not recognize gain or loss as a direct result of the Reorganization and no Acquiring Fund will recognize gain or loss as a direct result of a Reorganization. Prior to the closing of each Reorganization, each Target Fund expects to declare a distribution of all of its net investment income and net capital gains, if any. All or a portion of such distribution may be taxable to such Target Fund’s shareholders for U.S. federal income tax purposes. To the extent that portfolio securities of a Target Fund are sold in connection with any portfolio repositioning prior to the closing of a Reorganization, the Target Fund may realize gains or losses, which may increase or decrease the net capital gains or net investment income to be distributed by such Target Fund. For more information see the section of the enclosed Combined Proxy Statement/Prospectus entitled “Section A – Proposals 1-6: Reorganization Proposals – Additional Information About the Reorganizations – U.S. Federal Income Tax Status of the Reorganizations.”

Q: Will there be any changes to my fees and expenses as a result of the Reorganizations?

Yes. Following the proposed Reorganizations, the expenses borne by Target Fund shareholders as shareholders of the corresponding Acquiring Fund will change. Because the fees and expense structure of the BMO Funds and Columbia Funds differ, operating expenses of the Acquiring Funds generally are expected to be the same as or higher than the those of the Target Funds. See the enclosed Combined Proxy Statement/Prospectus under “Section A – Proposals 1-6: Reorganization Proposals – Summary – Fees and Expenses.”

Q: If approved, when will the Reorganizations happen?

Each Reorganization will take place following shareholder approval of such Reorganization, and, depending on the Target Fund, is expected to close in the fourth quarter of 2021 or the first quarter of 2022.

Q: How does the Board of Directors of the Target Company recommend that I vote on the Reorganization Proposals?

After careful consideration, the Board of Directors of the Target Company (the “BMO Funds Board”) recommends that you vote “FOR” the Reorganization Proposal with respect to your Target Fund.

Q: Am I being asked to vote on a new Investment Advisory Agreement with Columbia or a new Subadvisory Agreement with LGM Investments?

Only shareholders of BMO Mid-Cap Growth Fund are being asked to consider and vote on a new investment advisory agreement between the Target Company, with respect to BMO Mid-Cap Growth Fund, and Columbia (the “Investment Advisory Agreement Proposal”). Shareholders of BMO LGM Emerging Markets Equity Fund are being asked to consider and vote on a new subadvisory agreement between BMO AM and LGM Investments Limited (“LGM Investments”) (the “Subadvisory Agreement Proposal”). The Investment Advisory Agreement Proposal and the Subadvisory Agreement Proposal are referred to together as the “Advisory Agreement Proposals” and each, an “Advisory Agreement Proposal.”

Q: Why are shareholders of BMO Mid-Cap Growth Fund being asked to vote on the Investment Advisory Agreement Proposal?

Shareholders of BMO Mid-Cap Growth Fund are being asked to consider and vote on the Investment Advisory Agreement Proposal because certain investment personnel of BMO AM, including the investment personnel currently responsible for managing the assets of the BMO Mid-Cap Growth Fund, are expected to become employees of Columbia and may do so prior to the closing of the Reorganization of the Fund. As a

 

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result, shareholders of BMO Mid-Cap Growth Fund are being asked to vote on the Investment Advisory Agreement Proposal to assure continuity of portfolio management – i.e., by the same investment personnel currently managing the BMO Mid-Cap Growth Fund – but only to the extent the Reorganization of BMO Mid-Cap Growth Fund does not close prior to the investment personnel becoming employees of Columbia. Upon the new investment advisory agreement with Columbia taking effect, the existing advisory agreement with BMO AM would be terminated. Upon the closing of the Reorganization, the new advisory agreement will be terminated and the Acquiring Fund advisory agreement will apply.

Q: Why are shareholders of BMO LGM Emerging Markets Equity Fund being asked to vote on the Subadvisory Agreement Proposal?

Currently, LGM Investments serves as subadviser to BMO LGM Emerging Markets Equity Fund and is a wholly-owned subsidiary of Bank of Montreal. Pursuant to the EMEA Purchase Agreement, it is expected that Ameriprise Financial will acquire LGM Investments prior to the closing of the Reorganization. The closing of the transactions under the EMEA Purchase Agreement will be deemed to result in the “assignment” and termination of the current subadvisory agreement between LGM Investments and BMO AM (the “Current Subadvisory Agreement”) within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). Shareholders of BMO LGM Emerging Markets Equity Fund are being asked to consider and vote on the Subadvisory Agreement Proposal to assure continuity of subadvisory services – i.e., by the same investment personnel currently providing subadvisory services to BMO LGM Emerging Markets Equity Fund – if the Reorganization of BMO LGM Emerging Markets Equity Fund does not close prior to the assignment and termination of the Current Subadvisory Agreement. Upon the closing of the Reorganization, the subadvisory agreement with LGM will be terminated.

Q: What happens if shareholders of BMO Mid-Cap Growth Fund or BMO LGM Emerging Markets Equity Fund do not approve its applicable Advisory Agreement Proposal?

In order to ensure the continuity of portfolio management following the Board’s termination of the advisory agreement with respect to BMO Mid-Cap Growth Fund and following the termination of the subadvisory agreement with respect to BMO LGM Emerging Markets Equity Fund, the BMO Funds Board has approved the appointment of Columbia or LGM Investments to serve as adviser or subadviser, respectively, to such Fund for up to 150 days under the terms of, as applicable, an interim advisory agreement between the Target Company, on behalf of BMO Mid-Cap Growth Fund, and Columbia as permitted by Rule 15a-4 of the Investment Company Act of 1940, as amended (an “Interim Advisory Agreement”), or an interim subadvisory agreement between BMO AM and LGM Investments, with respect to BMO LGM Emerging Markets Equity Fund (the “Interim Subadvisory Agreement” and together with the Interim Advisory Agreement, the “Interim Agreements” and each, an “Interim Agreement”), respectively. The termination of BMO AM and appointment of Columbia as adviser with respect to such Funds pursuant to the Interim Advisory Agreement will take effect for a Fund only upon the determination of the BMO Funds Board, in its discretion, that the appointment of Columbia as investment adviser to replace BMO AM is necessary to ensure the continuous portfolio management of a Fund, i.e., where the key portfolio management personnel serving such Fund have joined or will be joining Columbia prior to the closing of the Reorganizations. Each Interim Advisory Agreement will take effect only if the Advisory Agreement Proposal has not been approved and the Reorganization of a Fund has not been consummated prior to the transition of investment personnel to Columbia. The existing advisory agreement would be terminated upon the Interim Advisory Agreement taking effect. LGM may also begin providing services under the Interim Subadvisory Agreement if the transactions under the EMEA Purchase Agreement close before the meeting of shareholders of the BMO LGM Emerging Markets Equity Fund. Under an Interim Agreement, the adviser’s and subadviser’s fees would be held in an interest-bearing escrow account. If the applicable Advisory Agreement Proposal is approved by the end of the 150 day period, the compensation (plus interest) payable under the applicable Interim Agreement will be paid to Columbia or, as applicable, LGM Investments; but if the applicable Advisory Agreement Proposal is not approved, Columbia or, as applicable LGM Investments will be paid, out of the escrow account, the lesser of (i) any costs incurred in providing

 

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investment advisory services or, as applicable, subadvisory services to the applicable Fund (plus interest earned on that amount while in escrow) or (ii) the total amount in the escrow account (plus interest earned).

Q: How does the BMO Funds Board recommend that I vote on the Advisory Agreement Proposals?

After careful consideration, the BMO Funds Board recommends that you vote “FOR” the Investment Advisory Agreement Proposal with respect to the BMO Mid-Cap Growth Fund and FOR” the Subadvisory Agreement Proposal with respect to the BMO LGM Emerging Markets Equity Fund.

General Information

Q: How can I vote?

You can vote in one of four ways:

 

 

By telephone (call the toll-free number listed on your proxy card)

 

 

By Internet (log on to the Internet site listed on your proxy card)

 

 

By mail (using the enclosed postage pre-paid envelope)

 

 

In person at the shareholder meeting scheduled to occur at 790 North Water Street, Suite 1100, Milwaukee, Wisconsin 53202, on November 8, 2021

The deadline for voting by telephone or Internet is 11:59 p.m. eastern time on November 7, 2021. We encourage you to vote as soon as possible to avoid the cost of additional solicitation efforts. Please refer to the enclosed proxy card for instructions for voting by telephone, Internet or mail.

Q: Whom should I call if I have questions?

If you have questions about any of the Proposals described in the Combined Proxy Statement/Prospectus or about voting procedures, please call the Target Funds’ proxy solicitor, Broadridge Financial Solutions, Inc., toll free at 1-888-991-1289.

 

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BMO FUNDS, INC.

BMO LGM Emerging Markets Equity Fund

BMO Mid-Cap Growth Fund

BMO Core Plus Bond Fund

BMO Corporate Income Fund

BMO Intermediate Tax-Free Fund

BMO Strategic Income Fund

790 North Water Street, Suite 1100

Milwaukee, Wisconsin 53202

1-800-236-FUND

(1-800-236-3863)

www.bmofunds.com

NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS

To be held on November 8, 2021

A Special Joint Meeting of Shareholders (the “Meeting”) of each of the funds listed above will be held at 9:00 a.m., local time, on November 8, 2021, at 790 North Water Street, Suite 1100, Milwaukee, Wisconsin 53202, for the purpose of considering the following proposals, as well as any other business that may properly come before the Meeting or any adjournments thereof.

Shareholders of each of the identified series of BMO Funds, Inc. (the “Target Company”) will vote separately on the proposals as shown below, as well as any other business that may properly come before the Meeting.

Proposals 1-6: Approve Agreement and Plan of Reorganization

To approve the Agreement and Plan of Reorganization by and among the Target Company, on behalf of its series BMO LGM Emerging Markets Equity Fund, BMO Mid-Cap Growth Fund, BMO Core Plus Bond Fund, BMO Corporate Income Fund, BMO Intermediate Tax-Free Fund and BMO Strategic Income Fund (each, a “Target Fund” and together, the “Target Funds”), Columbia Funds Series Trust I (the “Acquiring Trust”), on behalf of its series set forth in the table below (each, an “Acquiring Fund” and together, the “Acquiring Funds”), BMO Asset Management Corp. (“BMO AM”), and Columbia Management Investment Advisers, LLC (“Columbia”), pursuant to which (A) each Target Fund, as indicated below, will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the corresponding Acquiring Fund, in exchange for shares of a corresponding class of shares of the Acquiring Fund and the assumption by the Acquiring Fund of all liabilities and obligations of the Target Fund reflected in the Target Fund’s Statement of Assets and Liabilities prepared in accordance with generally accepted accounting principles and any director indemnification obligation of the Target Fund, in each case as described in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund’s shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate each such Target Fund. The consummation of one proposed reorganization is not contingent upon the consummation of any other proposed reorganization.


Shareholders of each Target Fund will vote separately on the reorganization proposals as shown below.

 

Proposal

  

Target Fund

  

Acquiring Fund

1

  

BMO LGM Emerging Markets Equity Fund

   Columbia Emerging Markets Fund

2

  

BMO Mid-Cap Growth Fund

   Columbia Mid Cap Growth Fund

3

  

BMO Core Plus Bond Fund

   Columbia Total Return Bond Fund

4

  

BMO Corporate Income Fund

   Columbia Corporate Income Fund
5    BMO Intermediate Tax-Free Fund   

Columbia Intermediate Municipal Bond Fund

6

  

BMO Strategic Income Fund

   Columbia Strategic Income Fund

Proposal 7: Approve a New Investment Advisory Agreement

To approve a proposed new Investment Advisory Agreement between the Target Company, on behalf of its series BMO Mid-Cap Growth Fund, and Columbia (the “Proposed Advisory Agreement”). Shareholders of BMO Mid-Cap Growth Fund will vote separately on the Proposed Advisory Agreement.

Proposal 8: Approve a New Subadvisory Agreement

To approve a proposed new Subadvisory Agreement between BMO AM and LGM Investments Limited, the current subadviser to BMO LGM Emerging Markets Equity Fund (the “Proposed Subadvisory Agreement”). Shareholders of BMO LGM Emerging Markets Equity Fund will vote separately on the Proposed Subadvisory Agreement.

Only shareholders of record of the Target Funds at the close of business on August 31, 2021, the record date for the Meeting, are entitled to notice of and to vote at the Meeting and at any adjournments or postponements thereof.

By order of the Board of Directors,

John M. Blaser

Secretary

October 5, 2021

 

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BMO FUNDS, INC.

BMO LGM Emerging Markets Equity Fund

BMO Mid-Cap Growth Fund

BMO Core Plus Bond Fund

BMO Corporate Income Fund

BMO Intermediate Tax-Free Fund

BMO Strategic Income Fund

COMBINED PROXY STATEMENT/PROSPECTUS

Dated October 5, 2021

Introduction

This Combined Proxy Statement/Prospectus is provided in connection with the solicitation of proxies to be voted at a special joint meeting of shareholders (the “Meeting”) of BMO LGM Emerging Markets Equity Fund, BMO Mid-Cap Growth Fund, BMO Core Plus Bond Fund, BMO Corporate Income Fund, BMO Intermediate Tax-Free Fund and BMO Strategic Income Fund (together, the “BMO Funds” or the “Target Funds” and each, a “BMO Fund” or a “Target Fund”), each of which is a series of BMO Funds, Inc. (the “Target Company”) and managed by BMO Asset Management Corp (“BMO AM”). The Meeting is scheduled for November 8, 2021 at 9:00 a.m., local time, at the offices of the Target Company, 790 North Water Street, Suite 1100, Milwaukee, Wisconsin 53202. The purpose of the Meeting is to consider and vote on proposals to reorganize each of the Target Funds into a series (each, an “Acquiring Fund” and together, the “Acquiring Funds”) of the Columbia Funds Series Trust I (the “Acquiring Trust”) managed by Columbia Management Investment Advisers, LLC (“Columbia”) and to amend the Articles of Incorporation of the Target Company to dissolve and terminate each Target Fund (each, a “Reorganization Proposal” and together, the “Reorganization Proposals”) as follows:

 

Target Fund

  

Acquiring Fund

BMO LGM Emerging Markets Equity Fund    Columbia Emerging Markets Fund
BMO Mid-Cap Growth Fund    Columbia Mid Cap Growth Fund
BMO Core Plus Bond Fund    Columbia Total Return Bond Fund
BMO Corporate Income Fund    Columbia Corporate Income Fund
BMO Intermediate Tax-Free Fund    Columbia Intermediate Municipal Bond Fund
BMO Strategic Income Fund    Columbia Strategic Income Fund

In addition, shareholders of BMO Mid-Cap Growth Fund are being asked to consider and vote on a proposal to approve a new investment advisory agreement (the “Proposed Advisory Agreement”) between the Target Company, with respect to BMO Mid-Cap Growth Fund, and Columbia (the “Investment Advisory Agreement Proposal”), which would take effect only to ensure the continuous portfolio management of BMO Mid-Cap Growth Fund prior to the close of its Reorganization (as defined below).

In addition, shareholders of BMO LGM Emerging Markets Equity Fund are being asked to consider and vote on a proposal to approve a new subadvisory agreement (the “Proposed Subadvisory Agreement”) between BMO AM, with respect to BMO LGM Emerging Markets Equity Fund, and LGM Investments Limited (“LGM Investments”), the current subadviser to the fund (the “Subadvisory Agreement Proposal” and together with the Investment Advisory Agreement Proposal, the “Advisory Agreement Proposals”).

The Reorganization Proposals and the Advisory Agreement Proposals are referred to together as the “Proposals” or each, a “Proposal.”


Specifically, at the Meeting, you and other shareholders of the BMO Funds will be asked to consider and vote upon the Proposals as follows:

 

Proposal

  

BMO Fund(s) Voting

on the Proposal

1    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO LGM Emerging Markets Equity Fund
2    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO Mid-Cap Growth Fund
3    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO Core Plus Bond Fund
4    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO Corporate Income Fund
5    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO Intermediate Tax-Free Fund

 

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Proposal

  

BMO Fund(s) Voting

on the Proposal

6    To approve an Agreement and Plan of Reorganization pursuant to which (A) the Target Fund will transfer that portion of its assets attributable to each class of its shares to the Acquiring Fund in exchange for shares of the corresponding class of the Acquiring Fund and the Acquiring Fund’s assumption of liabilities and obligations of the Target Fund as set forth in the Agreement and Plan of Reorganization, followed by the distribution of the Acquiring Fund’s shares of each class to the Target Fund shareholders of the corresponding class in complete liquidation of the Target Fund, and (B) the articles of incorporation of the Target Company will be amended to dissolve and terminate the Target Fund.    BMO Strategic Income Fund
7    To approve an Investment Advisory Agreement between the Target Company, with respect to BMO Mid-Cap Growth Fund, and Columbia.    BMO Mid-Cap Growth Fund
8    To approve a Subadvisory Agreement between BMO AM, with respect to BMO LGM Emerging Markets Equity Fund, and LGM Investments.    BMO LGM Emerging Markets Equity Fund

If shareholders of a Target Fund vote to approve the Agreement and Plan of Reorganization (the “Agreement”) and the other closing conditions are satisfied or waived, shareholders of the Target Fund will receive in their Target Fund’s Reorganization shares of the corresponding Acquiring Fund (in the share class corresponding to their current investment) having an aggregate net asset value equal to the net asset value of the shares of the Target Fund they held immediately prior to the Reorganization, as determined pursuant to the Agreement. The Target Fund will then be liquidated, dissolved and terminated as a series of the Target Company. The table below shows the Target Funds (and share classes) and corresponding Acquiring Funds (and share classes):

 

Target Fund and Share Classes

  

Corresponding Acquiring Fund and Share Classes

BMO LGM Emerging Markets Equity Fund    Columbia Emerging Markets Fund

Class A

Class I

  

Class A

Class Advisor (“Class Adv”)

BMO Mid-Cap Growth Fund    Columbia Mid Cap Growth Fund

Class A

Class I

Class R6

  

Class A

Class Adv

Class Institutional 3 (“Class Inst3”)

BMO Core Plus Bond Fund    Columbia Total Return Bond Fund

Class A

Class I

Class Y

  

Class A

Class Adv

Class A

BMO Corporate Income Fund    Columbia Corporate Income Fund

Class A

Class I

Class Y

  

Class A

Class Adv

Class A

BMO Intermediate Tax-Free Fund    Columbia Intermediate Municipal Bond Fund

Class A

Class I

Class Y

  

Class A

Class Adv

Class A

BMO Strategic Income Fund    Columbia Strategic Income Fund

Class A

Class I

Class Y

  

Class A

Class Adv

Class A

 

-3-


If the shareholders of one or more of the Target Funds approve the Reorganization Proposal but the shareholders of the other Target Fund(s) do not approve the Reorganization Proposal, then the Reorganization(s) will be implemented with regard to the Target Fund(s) that received shareholder approval of the Reorganization Proposal, provided the other closing conditions are satisfied. The Target Company’s Board of Directors (the “BMO Funds Board”) will consider additional actions with respect to any Target Fund that does not receive shareholder approval of the Reorganization Proposal or if other closing conditions are not satisfied or waived, which may include liquidating the Target Fund. Among other closing conditions, BMO’s ownership levels in the Acquiring Funds may not exceed certain thresholds.

If shareholders of BMO Mid-Cap Growth Fund do not approve the Advisory Agreement Proposal, Columbia could serve as adviser to such Fund for up to 150 days under the terms of an interim advisory agreement between the Target Company, on behalf of BMO Mid-Cap Growth Fund, and Columbia (an “Interim Advisory Agreement”) entered into pursuant to Rule 15a-4 under the Investment Company Act of 1940. Similarly, if shareholders of BMO LGM Emerging Markets Equity Fund do not approve the Subadvisory Agreement Proposal, or if, as discussed in greater detail in this Combined Proxy Statement/Prospectus, the current subadvisory agreement between BMO AM and LGM Investments terminates prior to the Meeting, LGM Investments could serve as subadviser to the BMO LGM Emerging Markets Equity Fund for up to 150 days under the terms of an interim subadvisory agreement between BMO AM and LGM Investments (an “Interim Subadvisory Agreement”). Under an Interim Advisory Agreement or Interim Subadvisory Agreement Columbia’s or LGM’s fees, as applicable, would be held in an interest-bearing escrow account. If the Advisory Agreement Proposal or Subadvisory Agreement Proposal is approved by the end of the 150 day period, the compensation (plus interest) payable under the Interim Advisory Agreement or Interim Subadvisory Agreement will be paid to Columbia or LGM; but if the Advisory Agreement Proposal or Subadvisory Agreement Proposal is not approved, Columbia or LGM will be paid, out of the escrow account, the lesser of (i) any costs incurred in providing investment advisory services to such BMO Equity Fund(s) (plus interest earned on that amount while in escrow) or (ii) the total amount in the escrow account (plus interest earned). The existing advisory agreement and subadvisory agreement, as applicable, would be terminated upon the Interim Advisory Agreement and Interim Subadvisory Agreement taking effect, respectively.

This document is a proxy statement for each BMO Fund and a prospectus for each corresponding Acquiring Fund. This Combined Proxy Statement/Prospectus and the enclosed proxy card will be mailed to shareholders of each BMO Fund beginning on or about October 8, 2021. This Combined Proxy Statement/Prospectus contains information you should know before voting on the Proposal(s) with respect to your BMO Fund. This Combined Proxy Statement/Prospectus also sets forth concisely the information about the Acquiring Funds that an investor should know before investing. You should retain this document for future reference. The shareholders of each BMO Fund will vote separately on the Proposal(s) for their BMO Fund.

The Proposal for each BMO Fund will be considered by shareholders who owned shares of each respective BMO Fund on August 31, 2021 (the “Record Date”). Each of the BMO Funds and the Acquiring Funds (each, a “Fund” and together, the “Funds”) is a registered open-end management investment company (or a series thereof). The principal business address of the BMO Funds is 790 North Water Street, Suite 1100, Milwaukee, Wisconsin 53202. The telephone number of the BMO Funds is 1-800-236-3863. The principal business address of the Acquiring Funds is 290 Congress Street, Boston Massachusetts 02210. The telephone number of the Acquiring Funds is 1-800-345-6611.

Where to Get More Information

The following documents have been filed with the Securities and Exchange Commission (the “SEC”) and are incorporated into this Combined Proxy Statement/Prospectus by reference:

 

 

Reorganization-Related Documents: the Statement of Additional Information of the Acquiring Funds relating to the Reorganizations, dated October 5, 2021; and

 

-4-


 

Target Company Documents (SEC File Nos. 033-49807 and 811-58433): (i) the Prospectus of the BMO Funds dated December 29, 2020, as supplemented February 16, 2021, February  24, 2021, April 6, 2021, April  13, 2021, April 19, 2021, June  2, 2021, and August 17, 2021; (ii) the Statement of Additional Information of the Target Funds dated December  29, 2020, as supplemented February 24, 2021, April 6, 2021, April 19, 2021, June 2, 2021, July 6, 2021 and August 17, 2021; (iii) the Report of the Independent Registered Public Accounting Firm and audited financial statements included in the Annual Report to Shareholders of the BMO Funds for the year ended August 31, 2020; and (iv)  the unaudited financial statements included in the Semiannual Report to Shareholders of the BMO Funds for the period ended February  28, 2021 as amended on May 17, 2021.

For a free copy of any of the documents listed above and/or to ask questions about this Combined Proxy Statement/Prospectus, please call your BMO Fund’s proxy solicitor toll free at 888-991-1289.

Each Fund is subject to the information requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act, and files reports, proxy materials and other information with the SEC. Copies of these reports, proxy materials and other information may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov. In addition, copies of these documents may be viewed online or downloaded from the SEC’s website at www.sec.gov. Copies of the BMO Funds’ documents are also available at no charge on the BMO Funds’ website www.bmofunds.com or by calling 1-800-236-FUND (3863). Copies of the Acquiring Funds’ current prospectuses, statements of additional information and reports to shareholders are available at no charge at https://www.columbiathreadneedleus.com/investor/ or by calling 1-800-345-6611.

Please note that investments in the Funds are not bank deposits, are not federally insured, are not guaranteed by any bank or government agency and may lose value. There is no assurance that any Fund will achieve its investment objectives.

AS WITH ALL OPEN-END MUTUAL FUNDS, THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED ON THE ADEQUACY OF THIS COMBINED PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

-5-


TABLE OF CONTENTS

 

     Page  

SECTION A — Proposals 1-6: Reorganization Proposals

     1  

SUMMARY

     1  

How Each Reorganization Will Work

     1  

U.S. Federal Income Tax Consequences of the Reorganizations

     2  

Fees and Expenses

     3  

Comparison of Acquiring Fund and Target Fund Service Providers

     16  

Comparison of Target Fund and Acquiring Fund Sales Charges and Distribution Arrangements

     16  

Comparison of Target Fund and Acquiring Fund Purchase and Redemption Provisions

     17  

SYNOPSIS OF PROPOSAL 1: COMPARISON OF BMO LGM EMERGING MARKETS EQUITY FUND AND COLUMBIA EMERGING MARKETS FUND

     19  

Overview

     19  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     19  

Additional Information About Principal Investment Strategies

     20  

Comparison of Fundamental Investment Policies

     21  

Comparison of Principal Risks

     23  

Comparison of Management of the Funds

     24  

Comparison of Performance

     24  

SYNOPSIS OF PROPOSAL 2: COMPARISON OF BMO MID-CAP GROWTH FUND AND COLUMBIA MID CAP GROWTH FUND

     28  

Overview

     28  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     28  

Additional Information About Principal Investment Strategies

     29  

Comparison of Fundamental Investment Policies

     30  

Comparison of Principal Risks

     32  

Comparison of Management of the Funds

     32  

Comparison of Performance

     33  

SYNOPSIS OF PROPOSAL 3: COMPARISON OF BMO CORE PLUS BOND FUND AND COLUMBIA TOTAL RETURN BOND FUND

     36  

Overview

     36  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     36  

Additional Information About Principal Investment Strategies

     38  

Comparison of Fundamental Investment Policies

     38  

Comparison of Principal Risks

     41  

Comparison of Management of the Funds

     41  

Comparison of Performance

     42  

SYNOPSIS OF PROPOSAL 4: COMPARISON OF BMO CORPORATE INCOME FUND AND COLUMBIA CORPORATE INCOME FUND

     44  

Overview

     44  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     45  

Additional Information About Principal Investment Strategies

     46  

Comparison of Fundamental Investment Policies

     47  

Comparison of Principal Risks

     49  

Comparison of Management of the Funds

     49  

Comparison of Performance

     50  


     Page  

SYNOPSIS OF PROPOSAL 5: COMPARISON OF BMO INTERMEDIATE TAX-FREE FUND AND COLUMBIA INTERMEDIATE MUNICIPAL BOND FUND

     53  

Overview

     53  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     53  

Additional Information About Principal Investment Strategies

     54  

Comparison of Fundamental Investment Policies

     55  

Comparison of Principal Risks

     58  

Comparison of Management of the Funds

     58  

Comparison of Performance

     59  

SYNOPSIS OF PROPOSAL 6: COMPARISON OF BMO STRATEGIC INCOME FUND AND COLUMBIA STRATEGIC INCOME FUND

     62  

Overview

     62  

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies

     62  

Additional Information About Principal Investment Strategies

     64  

Comparison of Fundamental Investment Policies

     64  

Comparison of Principal Risks

     67  

Comparison of Management of the Funds

     68  

Comparison of Performance

     68  

ADDITIONAL INFORMATION ABOUT THE REORGANIZATIONS

     71  

Terms of Each Reorganization

     71  

Conditions to Closing Each Reorganization

     71  

Termination of the Agreement

     72  

U.S. Federal Income Tax Status of the Reorganizations

     72  

Capitalization

     76  

Board Considerations

     81  

SECTION B — PROPOSALS 7-8: ADVISORY AGREEMENT PROPOSALS

     85  

PROPOSAL 7: APPROVE AN ADVISORY AGREEMENT FOR BMO MID-CAP GROWTH FUND

     85  

PROPOSAL 8: APPROVE A SUBADVISORY AGREEMENT FOR BMO LGM EMERGING MARKETS EQUITY FUND

     91  

SECTION C — PROXY VOTING AND SHAREHOLDER MEETING INFORMATION

     96  

Board Recommendation and Required Vote

     96  

Voting

     96  

Quorum and Methods of Tabulation

     96  

Shareholder Proxies

     97  

Proxy Statement Delivery

     97  

Revoking Your Proxy

     97  

Simultaneous Meetings

     98  

Solicitation of Proxies

     98  

Shareholder Proposals

     98  

Dissenters’ Right of Appraisal

     98  

Other Business

     98  

Adjournment

     98  

SECTION D — ADDITIONAL INFORMATION APPLICABLE TO THE ACQUIRING FUNDS

     99  

Principal Risks of the Acquiring Funds

     99  

Portfolio Managers

     112  

Additional Investment Strategies and Policies

     115  

Acquiring Funds Contact Information

     122  

Summary of Share Class Features

     123  

 

-ii-


     Page  

Sales Charges and Commissions

     124  

Repurchases (Reinstatements)

     131  

Restrictions and Changes in Terms and Conditions

     131  

Distribution and Service Fees

     131  

Financial Intermediary Compensation

     133  

Share Price Determination

     134  

Transaction Rules and Policies

     135  

Exchanging Shares

     147  

Distributions and Taxes

     149  

Appendix A to Section D

     154  

EXHIBIT A FINANCIAL HIGHLIGHTS

     A-1  

EXHIBIT B PRINCIPAL SHAREHOLDERS

     B-1  

EXHIBIT C COMPARISON OF ORGANIZATIONAL DOCUMENTS

     C-1  

EXHIBIT D MORE INFORMATION ON COLUMBIA

     D-1  

EXHIBIT E MORE INFORMATION ON LGM INVESTMENTS

     E-1  

EXHIBIT F FORM OF PROPOSED INVESTMENT ADVISORY AGREEMENT

     F-1  

EXHIBIT G FORM OF PROPOSED SUBADVISORY AGREEMENT

     G-1  

EXHIBIT H FEE RATES PAYABLE UNDER THE CURRENT AND PROPOSED ADVISORY AGREEMENTS

     H-1  

EXHIBIT I AMOUNTS PAID BY EACH FUND TO BMO AM AND AFFILIATES

     I-1  

 

-iii-


SECTION A — PROPOSALS 1-6: REORGANIZATION PROPOSALS

The following information describes the proposed reorganization of each Target Fund into the corresponding Acquiring Fund (each, a “Reorganization” and together, the “Reorganizations”). The Target Funds and the Acquiring Funds are referred to collectively as the “Funds.”

SUMMARY

Bank of Montreal, the parent company of BMO AM (collectively, “BMO”), reached a definitive agreement with Ameriprise Financial, Inc. (“Ameriprise Financial”), the parent company of Columbia, to sell to Ameriprise Financial the entities that represent BMO AM’s EMEA (Europe, the Middle East and Africa) asset management business (the “EMEA Purchase Agreement”). In addition, BMO has determined to exit the mutual fund investment advisory business in the United States, including ceasing management of the Target Funds. The EMEA acquisition also establishes a strategic relationship between Ameriprise and BMO, giving BMO’s North American wealth management clients opportunities to access a range of Columbia Threadneedle Investments2 management solutions, including the Acquiring Funds. As a result, to ensure that shareholders of the Target Funds have continued access to a large and stable mutual fund platform, BMO AM has proposed reorganizing the Target Funds into similar funds managed by Columbia. BMO AM believes that the Reorganizations offer shareholders of each Target Fund the opportunity to remain invested in an investment company with an investment strategy that is similar to that of their Target Fund. Columbia or an affiliate will pay BMO an amount based on a percentage of the advisory fees previously paid by the Target Funds to BMO AM with respect to the assets transferred in the Reorganizations. Pursuant to the terms of the EMEA Purchase Agreement, with respect to the Reorganizations, Ameriprise agreed that the Adviser would use reasonable endeavors to conduct its business to enable the following to be true: (i) for a period of not less than three (3) years after a reorganization, no more than twenty-five per cent (25%) of the members of the board of directors or trustees of any Acquiring Fund shall be “interested persons” (as defined in the Investment Company Act) of the Adviser and (ii) for a period of not less than two (2) years after a Reorganization, neither the Adviser nor any of its affiliates shall impose an “unfair burden” (within the meaning of the Investment Company Act, including any interpretations or no-action letters of the SEC) on any such Acquiring Fund as a result of the transactions contemplated by the EMEA Purchase Agreement. The BMO Funds Board has approved the Reorganizations, as has the Board of Trustees of the Acquiring Trust (the “Columbia Funds Board”). If approved by shareholders of a Target Fund, that Target Fund’s Reorganization is expected to close in either the fourth quarter of 2021 or the first quarter of 2022, depending on the Target Fund.

This Combined Proxy Statement/Prospectus is being used by each Target Fund to solicit proxies to vote at the Meeting. Shareholders of each Target Fund are being asked to consider a Reorganization Proposal to approve the Agreement providing for the Reorganization relating to their Target Fund, and an amendment to the Target Company’s articles of incorporation to dissolve and terminate their Target Fund.

The following is a summary of the Reorganization Proposals. More complete information appears later in this Combined Proxy Statement/Prospectus. You should carefully read the entire Combined Proxy Statement/Prospectus and the exhibits because they contain details that are not included in this summary.

How Each Reorganization Will Work. The following provides an overview of how each Reorganization will work.

 

 

Pursuant to the Agreement, each Target Fund will transfer all of its assets to the corresponding Acquiring Fund in exchange for shares of the Acquiring Fund (“Acquisition Shares”) and the Acquiring Fund’s assumption of (i) all liabilities and obligations of the Target Fund reflected on a Statement of Assets and Liabilities prepared as of the close of regular trading on the New York Stock Exchange (the “NYSE”) on the Valuation Date (as defined below) in accordance with generally accepted accounting principles and (ii) any obligation of the Target Fund to indemnify a BMO Funds director under the Target Company’s Articles of Incorporation and By-Laws, in each case as further described in the Agreement. As soon as practicable thereafter, each Target Fund will liquidate and distribute pro rata to shareholders of record of each class of its shares the Acquisition Shares of the corresponding class received by the Target Fund.

 

2 

Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.


 

The Acquiring Fund will issue and deliver to the corresponding Target Fund in exchange for the assets attributable to each class of its shares, Acquisition Shares of the corresponding class with an aggregate net asset value equal to the aggregate net asset value of the then-outstanding Target Fund shares of such class owned by Target Fund shareholders, in each case determined as set forth in the Agreement. Acquisition Shares of each participating class of shares of the Acquiring Funds will be distributed to the shareholders of the corresponding class of such Target Fund in proportion to their holdings of such class of shares of such Target Fund.

 

 

Under the Agreement, at the Closing, the net asset value of your Target Fund shares will be determined at the close of regular trading on the NYSE on the Valuation Date pursuant to the Acquiring Fund’s valuation procedures, which differ in certain respects from the Target Fund’s valuation procedures. The impact of these differences on the net asset value of your shares at the time of a Reorganization is uncertain, and could be positive or negative depending on market conditions at such time as this determination is made, and the positive or negative impact could exceed $0.01 per share of a Fund’s net asset value. The per share net asset value of Target Fund shares, as so determined, will be used to calculate the number of Acquiring Fund Shares issued to you in the Reorganization. The aggregate net asset value of your Target Fund shares, as so determined, will equal the aggregate net asset value of the Acquiring Fund shares received in the Reorganization.

 

 

Costs of the Reorganizations will be borne by BMO AM and Columbia, or their respective affiliates, whether or not such Reorganizations are consummated. Costs of the Reorganizations will not be borne by shareholders of the Funds, except to the extent that BMO AM and/or Columbia or their respective affiliates, who are bearing the costs of the Reorganizations, are themselves shareholders in the Funds. In addition, BMO AM has agreed to bear commissions and transaction fees incurred by the Target Funds in connection with portfolio repositioning prior to the Reorganizations. BMO AM has also agreed to bear the cost of a transition manager to execute transactions related to portfolio repositioning, if such a manager is deemed necessary.

 

 

Each Reorganization is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes. Accordingly, it is expected that Target Fund shareholders who exchange their Target Fund shares for Acquisition Shares of the corresponding Acquiring Fund in a Reorganization will not recognize gain or loss as a direct result of the Reorganization and no Acquiring Fund will recognize gain or loss as a direct result of a Reorganization. For more information about the U.S. federal income tax consequences of the Reorganizations, see the section of this Combined Proxy Statement/Prospectus entitled “Section A – Proposals 1-6: Reorganization Proposals – Additional Information About the Reorganizations – U.S. Federal Income Tax Status of the Reorganizations.”

 

 

Shareholders will not incur any initial or contingent deferred sales charges in connection with the Acquisition Shares issued in connection with a Reorganization. Subsequent purchases of shares will be subject to the policies of the Acquiring Funds described under “Additional information Applicable to the Acquiring Funds” below.

 

 

After a Reorganization is completed, Target Fund shareholders will be shareholders of the corresponding Acquiring Fund, and each Target Fund will be dissolved and terminated. Approval of a Reorganization Proposal includes approval to amend the Articles of Incorporation of the Target Company to dissolve and terminate the Target Fund.

 

 

Each Acquiring Fund will be the accounting and performance survivor of its Reorganization.

U.S. Federal Income Tax Consequences of the Reorganizations. Each Reorganization is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes and will not take place unless the Target Fund and the Acquiring Fund involved in such Reorganization receive a satisfactory opinion of tax counsel substantially to the effect that the Reorganization will qualify as a tax-free reorganization for U.S. federal income tax purposes, as described in more detail in the section entitled “Section A – Proposals 1-6: Reorganization Proposals – Additional Information About the Reorganizations – U.S. Federal Income Tax Status of the Reorganizations.” Accordingly, subject to the limited exceptions described in that section, no gain or loss is expected to be recognized by any Target Fund or its shareholders as a direct result of its Reorganization. A portion of the portfolio assets of each Target Fund is expected to be sold by the Target Fund before its

 

-2-


Reorganization. The actual tax effect of such sales will depend on the difference between the price at which such portfolio assets are sold and the tax basis of the Target Fund in such assets and the holding period of such assets at the time of such sale. Any capital gains recognized in any such sales on a net basis, after reduction by any available capital losses, will be distributed to shareholders as capital gain dividends (to the extent of net realized long-term capital gains over net realized short-term capital losses) and/or ordinary dividends (to the extent of net realized short-term capital gains over net realized long-term capital losses) during or with respect to the year of sale, and such distributions will be taxable to shareholders for U.S. federal income tax purposes. A discussion of the anticipated capital gains impact of the portfolio repositioning by each Target Fund on an aggregate and per share basis is included under “Section A – Proposals 1-6: Reorganizations Proposals – Fees and Expenses.” Additionally, because each Reorganization will end the tax year of the applicable Target Fund, it will accelerate distributions to shareholders from the Target Fund for its tax year ending on the date of the Reorganization. Those tax year-end distributions will be taxable, and will include any distributable, but not previously distributed, net income and net capital gains, to the extent not offset by available capital loss carryovers, if any, resulting from portfolio turnover prior to consummation of the Reorganization. At any time prior to a Reorganization, a shareholder may redeem shares of a Target Fund. Any such redemption would likely result in the recognition of gain or loss by the shareholder for U.S. federal income tax purposes. If a shareholder holds Target Fund shares in a non-taxable account, distributions and redemption proceeds with respect to those shares generally will not be currently taxable to the shareholder if those amounts remain in the non-taxable account.

A Target Fund shareholder’s aggregate tax basis in the Acquisition Shares received is expected to carry over from the shareholder’s Target Fund shares, and a Target Fund shareholder’s holding period in the Acquisition Shares is expected to include the shareholder’s holding period in the Target Fund shares.

For more information about the U.S. federal income tax consequences of the Reorganizations, see the section entitled “Section A – Proposals 1-6: Reorganization ProposalsAdditional Information About the Reorganizations – U.S. Federal Income Tax Status of the Reorganizations.” For more information regarding repositioning costs, see the section “Section A – Proposals 1-6: Reorganization Proposals – Summary – Fees and Expenses – Portfolio Turnover” below.

Fees and Expenses. The following tables describe the fees and expenses that you may pay if you buy, hold and sell shares of a Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. The tables enable you to compare and contrast the expense levels for the Target Funds and the Acquiring Funds, and obtain a general idea of what the expense levels will be if a Reorganization occurs.

Annual fund operating expenses shown in the tables below are based on expenses for the six months ended February 28, 2021 (annualized) for the Target Funds and for the most recent annual or semi-annual period end for which financial statements are published for each Acquiring Fund, as follows: (i) the six months ended February 28, 2021 (annualized) for each of Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund and Columbia Strategic Income Fund; (ii) the fiscal year ended April 30, 2021 for Columbia Total Return Bond Fund and Columbia Corporate Income Fund; and (iii) the six months ended April 30, 2021 (annualized) for Columbia Intermediate Municipal Bond Fund. Pro forma expenses are based on the twelve months ended as of the above periods.

Also shown are annual fund operating expenses projected for each Acquiring Fund on a pro forma basis after giving effect to each proposed Reorganization for that Acquiring Fund. Each Acquiring Fund includes share classes in addition to those whose expenses are shown below. The tables below include only those Acquiring Fund share classes that will participate in a Reorganization.

In comparing the fees and expenses of a Target Fund and its corresponding Acquiring Fund, you may wish to consider differences in fee structure. Each Acquiring Fund pays Columbia a fee for its management services, which include investment advisory services and administrative services. In contrast, each Target Fund pays BMO AM separate fees for advisory services on the one hand and administrative services on the other hand. BMO AM, as administrator of the Target Funds, is entitled to receive a fee from the Class A, Class I and Class Y shares of each

 

-3-


Target Fund of 0.15% of each Target Fund’s average daily net assets. This separate administrative services fee is reflected in each Target Fund’s “Other expenses” in the Annual Fund Operating Expenses tables below. Class A Shares received in the Reorganizations will not be subject to an initial or contingent deferred sales charges.

Shareholders of a Target Fund that hold Class A shares will receive Class A shares of the corresponding Acquiring Fund. Shareholders of a Target Fund that hold Class I shares will receive Class Adv shares of the corresponding Acquiring Fund. Shareholders of a Target Fund that hold Class R6 shares will receive Class Inst3 shares of the corresponding Acquiring Fund. Shareholders of a Target Fund that hold Class Y shares will receive Class A shares of the corresponding Acquiring Fund.

Reorganization of BMO LGM Emerging Markets Equity Fund into Columbia Emerging Markets Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO LGM Emerging Markets Equity Fund (Current)    Class A     Class I  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     5.00     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(1)      None  

Redemption Fee (as a percentage of amount redeemed, for shares held less than 30 days)

     2.00     2.00

 

Columbia Emerging Markets Fund (Current and Pro Forma)    Class A     Class Adv  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     5.75     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

        1.00 %(2)      None  

Redemption Fee (as a percentage of amount redeemed, for shares held less than 30 days)

     None       None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO LGM Emerging Markets Equity Fund (Current)    Class A     Class I  

Management fees

     0.90     0.90

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.30     0.30

Total annual Fund operating expenses

     1.45 %              1.20

Less: Fee waivers and/or expense reimbursements

     (0.05 )%(3)      (0.05 )%(3) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     1.40     1.15
Columbia Emerging Markets Fund (Current)    Class A     Class Adv  

Management fees

     0.98     0.98

Distribution and/or service (12b-1) fees

     0.25 %          0.00

Other expenses

     0.22     0.22 %     

Total annual Fund operating expenses

     1.45     1.20
Columbia Emerging Markets Fund (Pro Forma)    Class A     Class Adv  

Management fees

     0.98     0.98

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.24     0.24

Total annual Fund operating expenses

     1.47 %(4)      1.22 %(4) 

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

 

-4-


(2)

This charge is imposed on certain Acquiring Fund investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions.

(3)

BMO AM has agreed to waive or reduce its investment advisory fee and reimburse expenses to the extent necessary to prevent total annual operating expenses (excluding interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Target Fund’s business, and Acquired Fund Fees and Expenses) from exceeding 1.40% for Class A and 1.15% for Class I through December 31, 2022. This expense limitation agreement may not be terminated prior to December 31, 2022 without the consent of the BMO Funds Board, unless terminated due to the termination of the investment advisory agreement.

(4) 

The increase in total annual Fund operating expenses is due to differences in assets for the periods presented. No increase is expected if the pro forma fees and expenses and current fees and expenses were presented as of the same period. Current fees and expenses of the Acquiring Fund are presented for the six months ended February 28, 2021 (annualized). Pro forma fees and expenses are shown for the twelve months ended February 28, 2021.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO LGM Emerging Markets Equity Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 635        $ 931        $ 1,248        $ 2,144  

Class I

   $ 117        $ 376        $ 655        $ 1,450  

 

Columbia Emerging Markets Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 714        $ 1,007        $ 1,322        $ 2,210  

Class Adv

   $ 122        $ 381        $ 660        $ 1,455  

 

Columbia Emerging Markets Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 716        $ 1,013        $ 1,332        $ 2,231  

Class Adv

   $ 124        $ 387        $ 670        $ 1,477  

Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the Annual Fund Operating Expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO LGM Emerging Markets Equity Fund

     45

Columbia Emerging Markets Fund

     29

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of April 30, 2021, it is estimated that approximately 68% of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of April 30, 2021, the Target Fund would have realized net capital gains of $43,031,296 on an aggregate basis and $2.36 per share.

 

-5-


Reorganization of BMO Mid-Cap Growth Fund into Columbia Mid Cap Growth Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO Mid-Cap Growth Fund (Current)    Class A     Class I        Class R6  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     5.00     None          None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(1)      None          None  

 

Columbia Mid Cap Growth Fund (Current and Pro Forma)    Class A     Class Adv        Class Inst3  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     5.75     None          None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(2)      None          None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO Mid-Cap Growth Fund (Current)    Class A     Class I     Class R6  

Management fees

     0.68     0.68     0.68

Distribution and/or service (12b-1) fees

     0.25     0.00     0.00

Other expenses

     0.84     0.84     0.69

Total annual Fund operating expenses

     1.77 %              1.52 %              1.37 %         

Less: Fee waivers and/or expense reimbursements

     (0.53 )%(3)      (0.53 )%(3)      (0.53 %)(3) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     1.24     0.99     0.84
Columbia Mid Cap Growth Fund (Current)    Class A     Class Adv     Class Inst3  

Management fees

     0.74     0.74     0.74

Distribution and/or service (12b-1) fees

     0.25     0.00     0.00

Other expenses

     0.13 %          0.13 %          0.04 %     

Total annual Fund operating expenses

     1.12     0.87     0.78
Columbia Mid Cap Growth Fund (Pro Forma)    Class A     Class Adv     Class Inst3  

Management fees

     0.75 %(4)      0.75 %(4)      0.75 %(4) 

Distribution and/or service (12b-1) fees

     0.25     0.00     0.00

Other expenses

     0.13     0.13     0.03

Total annual Fund operating expenses

     1.13 %(4)      0.88 %(4)      0.78 %(4) 

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

(2)

This charge is imposed on certain Acquiring Fund investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions.

(3)

BMO AM has agreed to waive or reduce its investment advisory fee and reimburse expenses to the extent necessary to prevent class total annual operating expenses (excluding interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Target Fund’s business, and Acquired Fund Fees and Expenses) from exceeding 1.24% for Class A, 0.99% for Class I and 0.84% for Class R6 through December 31, 2022. This expense limitation agreement may not be terminated prior to December 31, 2022 without the consent of the BMO Funds Board, unless terminated due to the termination of the investment advisory agreement.

 

-6-


(4)

The increase in management fees and total annual Fund operating expenses is due to differences in assets for the periods presented. No increase is expected if the pro forma fees and expenses and current fees and expenses were presented as of the same period. Current fees and expenses of the Acquiring Fund are presented for the six months ended February 28, 2021 (annualized). Pro forma fees and expenses are shown for the twelve months ended February 28, 2021.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO Mid-Cap Growth Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 620        $ 980        $ 1,364        $ 2,438  

Class I

   $ 101        $ 428        $ 779        $ 1,767  

Class R6

   $ 86        $ 382        $ 699        $ 1,600  

 

Columbia Mid Cap Growth Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 683        $ 911        $ 1,156        $ 1,860  

Class Adv

   $ 89        $ 278        $ 482        $ 1,073  

Class Inst3

   $ 80        $ 249        $ 433        $ 966  

 

Columbia Mid Cap Growth Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 684        $ 913        $ 1,161        $ 1,871  

Class Adv

   $ 90        $ 281        $ 488        $ 1,084  

Class Inst3

   $ 80        $ 249        $ 433        $ 966  

Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the Annual Fund Operating Expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO Mid-Cap Growth Fund

     56

Columbia Mid Cap Growth Fund

     63

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of April 30, 2021, it is estimated that approximately 84% of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of April 30, 2021, the Target Fund would have realized net capital gains of $6,206,598 on an aggregate basis and $2.95 per share.

 

-7-


Reorganization of BMO Core Plus Bond Fund into Columbia Total Return Bond Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO Core Plus Bond Fund (Current)    Class A     Class I        Class Y  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.50     None          None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     0.55 %(1)      None          None  

 

Columbia Total Return Bond Fund (Current and Pro Forma)    Class A     Class Adv  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.00     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(2)      None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO Core Plus Bond Fund (Current)    Class A      Class I      Class Y  

Management fees

     0.12      0.12      0.12

Distribution and/or service (12b-1) fees

     0.25      0.00      0.00

Other expenses

     0.19      0.19      0.44

Total annual Fund operating expenses

     0.56      0.31      0.56

 

Columbia Total Return Bond Fund (Current)      Class A     Class Adv  

Management fees

       0.48     0.48

Distribution and/or service (12b-1) fees

       0.25     0.00

Other expenses

       0.15     0.15

Total annual Fund operating expenses

       0.88 %(3)      0.63 %(3) 

Less: Fee waivers and/or expense reimbursements

       (0.14 )%(4)      (0.14 )%(4) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

       0.74     0.49
Columbia Total Return Bond Fund (Pro Forma)(5)      Class A     Class Adv  

Management fees

       0.47%       0.47%  

Distribution and/or service (12b-1) fees

       0.25%       0.00%  

Other expenses

       0.15%       0.15%  

Total annual Fund operating expenses

       0.87%(3)       0.62%(3)  

Less: Fee waivers and/or expense reimbursements

       (0.13)%(4)(6)       (0.13)%(4)(6)  

Total net annual Fund operating expenses (after waivers and/or reimbursements)

       0.74%       0.49%  

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

(2)

This charge is imposed on certain Acquiring Fund investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions.

(3)

“Total annual Fund operating expenses” include acquired fund fees and expenses (expenses the Acquiring Fund incurs indirectly through its investments in other investment companies) and may be higher than the ratio of expenses to average net assets shown in the Financial Highlights section of this Combined Proxy Statement/Prospectus because the ratio of expenses to average net assets does not include acquired fund fees and expenses.

(4)

Columbia and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses)

 

-8-


  through August 31, 2023, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.74% for Class A and 0.49% for Class Adv.
(5) 

Pro forma expenses assume a reduction of approximately 18% in the assets of the Target Fund acquired in the Reorganization due to anticipated redemptions prior to the Reorganization.

(6) 

Columbia and certain of its affiliates have further contractually agreed, effective upon the closing of the Reorganization to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) through August 31, 2024, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.74% for Class A and 0.49% for Class Adv.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangements only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO Core Plus Bond Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 405        $ 523        $ 652        $ 1,027  

Class I

   $ 32        $ 100        $ 174        $ 393  

Class Y

   $ 57        $ 179        $ 313        $ 701  
Columbia Total Return Bond Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 373        $ 559        $ 760        $ 1,339  

Class Adv

   $ 50        $ 188        $ 337        $ 773  
Columbia Total Return Bond Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 373        $ 543        $ 742        $ 1,316  

Class Adv

   $ 50        $ 172        $ 319        $ 749  

Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the annual Fund operating expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO Core Plus Bond Fund

     28

Columbia Total Return Bond Fund

     295

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of May 31, 2021, it is estimated that approximately 33% of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of May 31, 2021, the Target Fund would have realized net capital gains of $14,282,864 on an aggregate basis and $0.14 per share.

 

-9-


Reorganization of BMO Corporate Income Fund into Columbia Corporate Income Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO Corporate Income Fund (Current)    Class A     Class I        Class Y  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.50     None          None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     0.55 %(1)      None          None  

 

Columbia Corporate Income Fund (Current and Pro Forma)    Class A     Class Adv  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     4.75     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(2)      None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO Corporate Income Fund (Current)    Class A     Class I      Class Y  

Management fees

     0.18     0.18      0.18

Distribution and/or service (12b-1) fees

     0.25     0.00      0.00

Other expenses

     0.22     0.22      0.47

Total annual Fund operating expenses

     0.65     0.40      0.65

Less: Fee waivers and/or expense reimbursements

     (0.06 )%(3)      (3)       (0.06 )%(3) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     0.59     0.40      0.59

 

Columbia Corporate Income Fund (Current)    Class A     Class Adv  

Management fees

     0.49     0.49

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.19     0.19

Total annual Fund operating expenses

     0.93 %(4)      0.68 %(4) 

Less: Fee waivers and/or expense reimbursements

     (0.06 )%(5)          (0.06 )%(5)         

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     0.87     0.62
Columbia Corporate Income Fund (Pro Forma)    Class A     Class Adv  

Management fees

     0.49     0.49

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.17     0.17

Total annual Fund operating expenses

     0.91 %,(4)      0.66 %(4) 

Less: Fee waivers and/or expense reimbursements

     (0.04 )%(5)(6)      (0.04 )%(5)(6) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     0.87     0.62

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

(2)

This charge is imposed on certain Acquiring Fund investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions.

(3)

BMO AM has agreed to waive or reduce its investment advisory fee and reimburse expenses to the extent necessary to prevent total annual operating expenses (excluding interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Fund’s business, and Acquired Fund Fees and Expenses)

 

-10-


  from exceeding 0.59% for Class A, 0.55% for Class I and 0.59% for Class Y through December 31, 2022. This expense limitation agreement may not be terminated prior to December 31, 2022 without the consent of the BMO Funds Board, unless terminated due to the termination of the investment advisory agreement.
(4)

“Total annual Fund operating expenses” include acquired fund fees and expenses (expenses the Acquiring Fund incurs indirectly through its investments in other investment companies) and may be higher than the ratio of expenses to average net assets shown in the Financial Highlights section of this Combined Proxy Statement/Prospectus because the ratio of expenses to average net assets does not include acquired fund fees and expenses.

(5) 

Columbia and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) through August 31, 2023, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.87% for Class A and 0.62% for Class Adv.

(6) 

Columbia and certain of its affiliates have further contractually agreed, effective upon the closing of the Reorganization to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) through August 31, 2024, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.87% for Class A and 0.62% for Class Adv.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangements only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO Corporate Income Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 408        $ 545        $ 694        $ 1,127  

Class I

   $ 41        $ 128        $ 224        $ 505  

Class Y

   $ 60        $ 202        $ 356        $ 805  
Columbia Corporate Income Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 560        $ 752        $ 960        $ 1,558  

Class Adv

   $ 63        $ 212        $ 373        $ 841  
Columbia Corporate Income Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 560        $ 744        $ 947        $ 1,534  

Class Adv

   $ 63        $ 203        $ 360        $ 815  

Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the annual Fund operating expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO Corporate Income Fund

     31

Columbia Corporate Income Fund

     74

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of May 31, 2021, it is estimated that approximately 36%

 

-11-


of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of May 31, 2021, the Target Fund would have realized net capital gains of $8,211,913 on an aggregate basis and $0.25 per share.

Reorganization of BMO Intermediate Tax-Free Fund into Columbia Intermediate Municipal Bond Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO Intermediate Tax-Free Fund (Current)    Class A     Class I        Class Y  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.50     None          None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

         0.55 %(1)      None          None  

 

Columbia Intermediate Municipal Bond Fund (Current and Pro Forma)    Class A     Class Adv  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.00     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     0.75 %(2)      None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO Intermediate Tax-Free Fund (Current)    Class A     Class I      Class Y  

Management fees

     0.12     0.12      0.12

Distribution and/or service (12b-1) fees

     0.25     0.00      0.00

Other expenses

     0.18     0.18      0.43

Total annual Fund operating expenses

     0.55     0.30      0.55

Less: Fee waivers and/or expense reimbursements

     (0.01 )%(3)      (3)       (0.01 )%(3) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     0.54     0.30      0.54

 

Columbia Intermediate Municipal Bond Fund (Current)    Class A   Class Adv

Management fees

   0.47%   0.47%

Distribution and/or service (12b-1) fees

   0.20%   0.00%

Other expenses

   0.17%   0.17%

Total annual Fund operating expenses

   0.84%(4)   0.64%(4)

Less: Fee waivers and/or expense reimbursements

   (0.23)%(5)       (0.23)%(5)        

Total net annual Fund operating expenses (after waivers and/or reimbursements)

   0.61%   0.41%
Columbia Intermediate Municipal Bond Fund (Pro Forma)    Class A   Class Adv

Management fees

   0.45%   0.45%

Distribution and/or service (12b-1) fees

   0.20%   0.00%

Other expenses

   0.15%   0.15%

Total annual Fund operating expenses

   0.80%(4)   0.60%(4)

Less: Fee waivers and/or expense reimbursements

   (0.19)%(5)(6)   (0.19)%(5)(6)

Total net annual Fund operating expenses (after waivers and/or reimbursements)

   0.61%   0.41%

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

 

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(2)

This charge is imposed on certain Acquiring Fund investments of $500,000 or more redeemed within 12 months after purchase, with certain limited exceptions.

(3)

BMO AM has agreed to waive or reduce its investment advisory fee and reimburse expenses to the extent necessary to prevent total annual operating expenses (excluding interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Target Fund’s business, and Acquired Fund Fees and Expenses) from exceeding 0.54% for Class A, 0.50% for Class I and 0.54% for Class Y through December 31, 2022. This expense limitation agreement may not be terminated prior to December 31, 2022 without the consent of the BMO Funds Board, unless terminated due to the termination of the investment advisory agreement.

(4)

“Total annual Fund operating expenses” include acquired fund fees and expenses (expenses the Acquiring Fund incurs indirectly through its investments in other investment companies) and may be higher than the ratio of expenses to average net assets shown in the Financial Highlights section of this Combined Proxy Statement/Prospectus because the ratio of expenses to average net assets does not include acquired fund fees and expenses.

(5) 

Columbia and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) through February 28, 2023, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.61% for Class A and 0.41% for Class Adv.

(6) 

Columbia and certain of its affiliates have further contractually agreed, effective upon the closing of the Reorganization to waive fees and/or to reimburse expenses (excluding transaction costs and certain other investment-related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) through February 29, 2024, unless sooner terminated at the sole discretion of the Columbia Funds Board. Under this agreement, the Acquiring Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.61% for Class A and 0.41% for Class Adv.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangements only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO Intermediate Tax-Free Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 403        $ 519        $ 646        $ 1,014  

Class I

   $ 31        $ 97        $ 169        $ 381  

Class Y

   $ 55        $ 175        $ 306        $ 688  
Columbia Intermediate Municipal Bond Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 360        $ 538        $ 730        $ 1,285  

Class Adv

   $ 42        $ 182        $ 334        $ 777  
Columbia Intermediate Municipal Bond Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 360        $ 510        $ 694        $ 1,225  

Class Adv

   $ 42        $ 153        $ 296        $ 713  

 

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Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the annual Fund operating expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO Intermediate Tax-Free Fund

     52

Columbia Intermediate Municipal Bond Fund

     9

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of May 31, 2021, it is estimated that approximately 1% of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of May 31, 2021, the Target Fund would not have realized any net capital gains or losses.

Reorganization of BMO Strategic Income Fund into Columbia Strategic Income Fund

Shareholder Fees (fees paid directly from your investment)

 

BMO Strategic Income Fund (Current)        Class A             Class I              Class Y      

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     3.50     None        None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(1)      None        None  

 

Columbia Strategic Income Fund (Current and Pro Forma)    Class A     Class Adv  

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

     4.75     None  

Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower)

     1.00 %(2)      None  

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

BMO Strategic Income Fund (Current)    Class A     Class I     Class Y  

Management fees

     0.25     0.25     0.25

Distribution and/or service (12b-1) fees

     0.25     0.00     0.00

Other expenses

     0.47     0.47     0.72

Total annual Fund operating expenses

     0.97     0.72     0.97

Less: Fee waivers and/or expense reimbursements

     (0.17 )%(3)      (0.17 )%(3)      (0.17 %)(3) 

Total net annual Fund operating expenses (after waivers and/or reimbursements)

     0.80     0.55     0.80

 

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Columbia Strategic Income Fund (Current)    Class A     Class Adv  

Management fees

     0.55     0.55

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.12 %              0.12

Total annual Fund operating expenses

     0.92     0.67 %     
Columbia Strategic Income Fund (Pro Forma)    Class A     Class Adv  

Management fees

     0.56 %(4)      0.56 %(4) 

Distribution and/or service (12b-1) fees

     0.25     0.00

Other expenses

     0.12     0.12

Total annual Fund operating expenses

     0.93 %(4)      0.68 %(4) 

 

(1)

The Maximum Deferred Sales Charge on Target Fund Class A shares is applied only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase.

(2)

This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions.

(3)

BMO AM has agreed to waive or reduce its investment advisory fee and reimburse expenses to the extent necessary to prevent total annual operating expenses (excluding interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Fund’s business, and Acquired Fund Fees and Expenses) from exceeding 0.80% for Class A, 0.55% for Class I and 0.80% for Class Y through December 31, 2022. This expense limitation agreement may not be terminated prior to December 31, 2022 without the consent of the BMO Funds Board, unless terminated due to the termination of the investment advisory agreement.

(4)

The increase in management fees and total annual Fund operating expenses is due to differences in assets for the periods presented. No increase is expected if the pro forma fees and expenses and current fees and expenses were presented as of the same period. Current fees and expenses of the Acquiring Fund are presented for the six months ended February 28, 2021 (annualized). Pro forma fees and expenses are shown for the twelve months ended February 28, 2021.

Expense Examples

These examples are intended to help you compare the cost of investing in shares of the Target Fund with the cost of investing in the Acquiring Fund on a pro forma basis, and allow you to compare these costs with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated, whether you redeem all of your shares at the end of those periods or not. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Annual Fund Operating Expenses table above. Although your actual costs may be higher or lower, based on those assumptions, your costs would be (whether or not shares are redeemed):

 

BMO Strategic Income Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 429        $ 632        $ 852        $ 1,483  

Class I

   $ 56        $ 213        $ 384        $ 879  

Class Y

   $ 82        $ 292        $ 520        $ 1,174  
Columbia Strategic Income Fund (Current)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 564        $ 754        $ 960        $ 1,553  

Class Adv

   $ 68        $ 214        $ 373        $ 835  
Columbia Strategic Income Fund (Pro Forma)    1 Year        3 Years        5 Years        10 Years  

Class A

   $ 565        $ 757        $ 965        $ 1,564  

Class Adv

   $ 69        $ 218        $ 379        $ 847  

Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs

 

-15-


and may result in a greater amount of taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in the annual Fund operating expenses table or in the expense examples, affect a Fund’s performance. During each Fund’s most recent fiscal year for which financial statements were published, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:

 

Fund

   Portfolio Turnover  

BMO Strategic Income Fund

     31

Columbia Strategic Income Fund

     173

A portion of the Target Fund’s portfolio assets is expected to be sold by the Target Fund prior to its Reorganization. If the Reorganization had occurred as of May 31, 2021, it is estimated that approximately 73% of the Target Fund’s investment portfolio would have been sold by the Target Fund before the Reorganization. BMO AM will bear brokerage commissions and transaction fees in connection with such repositioning. If such repositioning had occurred as of May 31, 2021, the Target Fund would have realized net capital gains of $646,781 on an aggregate basis and $0.06 per share.

Comparison of Acquiring Fund and Target Fund Service Providers. The following provides a comparison of the service providers for the Funds.

 

Service Provider

  

Target Funds

 

Acquiring Funds

Administrator   

BMO Asset Management Corp.

115 South LaSalle Street

Chicago, Illinois 60603

 

Columbia Management Investment Advisers, LLC*

290 Congress Street

Boston, Massachusetts 02210

Sub-Administrator   

State Street Bank and Trust Company

1 Iron Street

Boston, Massachusetts 02116

  N/A
Custodian   

State Street Bank and Trust Company

1 Iron Street

Boston, Massachusetts 02116

 

JPMorgan Chase Bank, N.A.

1 Chase Manhattan Plaza, 19th Floor

New York, New York, 10005

Fund Accounting Services Provider   

State Street Bank and Trust Company

1 Iron Street

Boston, Massachusetts 02116

 

Columbia Management Investment Advisers, LLC*

290 Congress Street

Boston, Massachusetts 02210

Transfer Agent   

SS&C Technologies, Inc.

2000 Crown Colony Drive

Quincy, Massachusetts 02171

 

Columbia Management Investment Services Corp.

290 Congress Street

Boston, Massachusetts 02210

Independent Registered Public Accountant   

KPMG LLP

191 West Nationwide Blvd., Suite 500

Columbus, Ohio 43215

 

PricewaterhouseCoopers LLP

45 South Seventh Street, Suite 3400

Minneapolis, Minnesota 55402

Distributor   

Foreside Financial Services, LLC

Three Canal Plaza

Portland, Maine 04101

 

Columbia Management Investment Distributors, Inc.

290 Congress Street

Boston, Massachusetts 02210

 

*

Services provided by Columbia under the terms of the Acquiring Funds’ Investment Management Agreements.

Comparison of Target Fund and Acquiring Fund Sales Charges and Distribution Arrangements. Class A shares of each Target Fund are subject to a front-end sales load. For BMO LGM Emerging Markets

 

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Equity Fund and BMO Mid-Cap Growth Fund, the maximum front-end sales load is 5.00%. For BMO Core Plus Bond Fund, BMO Corporate Income Fund, BMO Intermediate Tax-Free Fund and BMO Strategic Income Fund, the maximum front-end sales load is 3.50%. For the Target Funds, purchases of Class A shares of $1 million or more are not subject to a front-end sales load but are subject to a contingent deferred sales charge on redemptions of shares within 18 months of purchase. The contingent differed sales charge is 1.00% for purchases of BMO LGM Emerging Markets Equity Fund and BMO Mid-Cap Growth Fund and 0.55% for purchases for BMO Core Plus Bond Fund, BMO Corporate Income Fund, BMO Intermediate Tax-Free Fund and BMO Strategic Income Fund. Class I shares and Class Y shares of the Target Funds do not impose a front-end sales load or contingent deferred sales charge. Each Target Fund’s sales load is subject to reduction or waiver based on factors such as the identity of the buyer, the amount of shares purchased, or the financial intermediary through which a shareholder acquired Target Fund shares. BMO LGM Emerging Markets Equity Fund also charges a redemption fee of 2.00% for Class I and Class A shares held less than 30 days.

Class A shares of each Acquiring Fund are subject to a front-end sales load. For Columbia Emerging Markets Fund and Columbia Mid Cap Growth Fund, the maximum front-end sales load on purchases of Class A shares is 5.75%. For Columbia Total Return Bond Fund and Columbia Intermediate Municipal Bond Fund, the maximum front-end sales load on purchases of Class A shares is 3.00%. For Columbia Corporate Income Fund and Columbia Strategic Income Fund, the maximum front-end sales load on purchases of Class A shares is 4.75%. Purchases of Class A shares of between $1 million and $50 million of each Acquiring Fund (except for Columbia Intermediate Municipal Bond Fund) are subject to a contingent deferred sales charge of 1.00% on redemptions within 12 months of purchase and 0.50% on redemptions after 12 months but within 18 months of purchase. Purchases of Class A shares greater than $500,000 of Columbia Intermediate Municipal Bond Fund are subject to a contingent deferred sales charge of 0.75% on redemptions of such shares within 12 months of purchase. Each Acquiring Fund’s sales load is subject to reduction or waiver based on factors such as the identity of the buyer, the amount of shares purchased, or the financial intermediary through which a shareholder acquired Acquiring Fund shares. Class Adv and Class Inst3 shares of the Acquiring Funds do not impose a front-end sales load or contingent deferred sales charge.

Class A shares of both the Target Funds and the Acquiring Funds are subject to a 0.25% Rule 12b-1 distribution and service fee.

Comparison of Target Fund and Acquiring Fund Purchase and Redemption Provisions. Shares of the Target Funds may be purchased or sold on any day the NYSE is open for business. Class A and Class Y shares of the Target Funds have an investment minimum of $1,000 with a subsequent investment minimum of $50. Class I shares have an investment minimum of $1,000,000. In certain instances the investment minimums may be waived in the Target Funds’ discretion. Class R6 shares of the Target Funds do not have an investment minimum but may be purchased or sold only by eligible retirement plans, fee-based wrap programs, and other registered investment companies. The Target Funds may be purchased by phone, by mail or by wire transaction.

Shares of the Acquiring Funds may be purchased or sold on any day the NYSE is open for business. Class A shares of the Acquiring Funds have a $2,000 investment minimum for non-IRA accounts and a $1,000 investment minimum for IRA accounts. The minimum initial investment in Class Adv and Class Inst3 shares is $2,000 ($1,000 for IRA accounts; $100 for systematic investment plan accounts) for commissionable brokerage platforms where the financial intermediary, acting as broker on behalf of its customers, charges the customer a commission for effecting transactions in Acquiring Fund shares; provided that the financial intermediary has an agreement with the Acquiring Funds’ distributor that specifically authorizes offering, as applicable, Class Adv or Class Inst3 shares within such platform and, with respect to Class Inst3 shares, Acquiring Fund shares are held in an omnibus account; for all other eligible Class Adv share investors, there is no minimum initial investment.

There is no minimum initial investment in Class Inst3 shares for: group retirement plans that maintain plan-level or omnibus accounts with the Acquiring Fund; collective trust funds; affiliated or unaffiliated mutual funds (e.g., funds operating as funds-of-funds); fee-based platforms of financial intermediaries (or the clearing

 

-17-


intermediary that they trade through) that have an agreement with the Acquiring Funds’ distributor or an affiliate thereof that specifically authorizes the financial intermediary to offer and/or service Class Inst3 shares within such platform and Acquiring Fund shares are held in an omnibus account; and bank trust departments, subject to an agreement with the Acquiring Funds’ distributor that specifically authorizes offering Class Inst3 shares and provided that Acquiring Fund shares are held in an omnibus account. For certain institutional investors, the minimum initial investment in Class Inst3 is $1 million, which may be waived in the discretion of the Acquiring Funds’ distributor. In each case above where noted that Acquiring Fund shares are required to be held in an omnibus account, the Acquiring Funds’ distributor may, in its discretion, determine to waive this requirement.

There is no minimum initial investment in Class Adv shares for (i) omnibus retirement plans, including self-directed brokerage accounts within omnibus retirement plans that clear through institutional no transaction fee (NTF) platforms; (ii) trust companies or similar institutions; (iii) broker-dealers, banks, trust companies and similar institutions that clear Acquiring Fund share transactions for their client or customer investment advisory or similar accounts through designated financial intermediaries and their mutual fund trading platforms that have been granted specific written authorization from the Acquiring Fund’s transfer agent with respect to Class Adv eligibility apart from selling, servicing or similar agreements; (iv) 501(c)(3) charitable organizations; (v) 529 plans; (vi) health savings accounts; and (vii) investors participating in a fee-based advisory program sponsored by a financial intermediary or other entity that is not compensated by the Acquiring Fund for those services, other than payments for shareholder servicing or sub-accounting performed in place of the Acquiring Fund’s transfer agent.

No share classes of the Acquiring Funds have a subsequent investment minimum.

 

-18-


SYNOPSIS OF PROPOSAL 1: COMPARISON OF BMO LGM EMERGING MARKETS EQUITY FUND AND COLUMBIA EMERGING MARKETS FUND

Overview. BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund:

 

 

Have similar investment objectives and are both diversified.

 

 

Have the same fiscal year end: August 31.

 

 

Are structured as series of separate open-end management investment companies. BMO LGM Emerging Markets Equity Fund is organized as a series of a Wisconsin corporation. Columbia Emerging Markets Fund is organized as a series of a Massachusetts business trust.

 

 

Have different advisers. BMO AM is the investment adviser and LGM Investments is the subadviser to BMO LGM Emerging Markets Equity Fund. Columbia is the investment adviser to Columbia Emerging Markets Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund are set forth in the table below. Each Fund’s investment objective is non-fundamental and may be changed without shareholder approval.

Both BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund’s investment policies with respect to 80% of their respective total assets may be changed by the Fund’s Board without shareholder approval as long as shareholders are given 60 days’ advance written notice of the change.

The Funds have similar investment objectives; however, there are certain differences in the Funds’ principal investment strategies. Each Fund invests at least 80% of its assets in equity securities of companies in emerging markets. Both Funds may invest in companies across all market capitalizations. Columbia Emerging Markets Fund has a stated policy that it may invest in special situations, such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies, whereas BMO LGM Emerging Markets Equity Fund does not have a similar principal investment strategy on these types of investments (although it may make such investments).

 

    

BMO LGM Emerging Markets Equity Fund

(Target Fund)

 

Columbia Emerging Markets Fund

(Acquiring Fund)

Investment Objective    The Fund seeks to provide capital appreciation.   The Fund seeks long-term capital appreciation.
Principal Investment Strategies   

The Fund invests at least 80% of its assets in equity securities of foreign companies located in emerging markets or whose primary business activities or principal trading markets are in emerging markets.

 

LGM Investments, an affiliate of BMO AM, considers emerging markets to be those markets in any country other than Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom and the United States. LGM Investments may make adjustments to the list of emerging markets countries

  Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies located in emerging market countries. The Fund may also gain exposure to such companies through investment in depositary receipts. Emerging market countries include those countries whose economies are considered to be developing or emerging from underdevelopment.

 

-19-


    

BMO LGM Emerging Markets Equity Fund

(Target Fund)

 

Columbia Emerging Markets Fund

(Acquiring Fund)

   from time to time based on economic criteria, market changes, or other factors.  
Sector Focus    The Fund may at times focus its investments in one or more sectors.   The Fund may invest in a variety of countries, industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector.
Special Situations      The Fund may invest in special situations, such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. In selecting investments for BMO LGM Emerging Markets Equity Fund, LGM Investments:

 

 

uses a “bottom-up,” fundamental approach to identify quality, growth companies typically with dominant industry positions, strong balance sheets, and cash flows to support a sustainable dividend payout; and

 

 

integrates environmental, social, and governance (“ESG”) considerations into its investment process.

From time to time, the BMO LGM Emerging Markets Equity Fund maintains a portion of its assets in cash. The Fund may increase its cash holdings in response to market conditions or in the event attractive investment opportunities are not available.

In selecting investments for Columbia Emerging Markets Fund, Columbia employs fundamental analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio. The Fund may invest in securities that the investment manager believes are undervalued, represent growth opportunities, or both. Columbia considers, among other factors:

 

 

various measures of valuation, including price-to-cash flow, price-to-earnings, price-to-sales, price-to-book value and discounted cash flow;

 

 

potential indicators of stock price appreciation, such as anticipated earnings growth, company restructuring, changes in management, business model changes, new product opportunities, or anticipated improvements in macroeconomic factors;

 

 

the financial condition and management of a company, including its competitive position, the quality of its balance sheet and earnings, its future prospects, and the potential for growth and stock price appreciation; and/or

 

 

overall economic and market conditions

Columbia believes that companies with lower valuations are generally more likely to provide opportunities for capital appreciation.

 

-20-


Columbia may sell a security when the security’s price reaches a target set by Columbia; if Columbia believes that there is deterioration in the issuer’s financial circumstances or fundamental prospects; if other investments are more attractive; or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO LGM Emerging Markets Equity Fund

(Target Fund)

 

Columbia Emerging Markets Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.

 

-21-


Policy

  

BMO LGM Emerging Markets Equity Fund

(Target Fund)

 

Columbia Emerging Markets Fund

(Acquiring Fund)

Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.   The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of its total assets in any one industry or industries, except as permitted by the SEC. However, investing in U.S. government securities shall not be considered investments in any one industry.   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

 

-22-


Policy

  

BMO LGM Emerging Markets Equity Fund

(Target Fund)

 

Columbia Emerging Markets Fund

(Acquiring Fund)

Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.

Comparison of Principal Risks. Columbia Emerging Markets Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund are subject to many of the same principal risks, but such risks differ primarily due to Columbia Emerging Markets Fund’s stated principal investment strategy to invest in special situations and other types of equity securities such as convertible securities, depositary receipts and preferred securities. In addition, while some of the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO LGM Emerging
Markets Equity Fund
(Target Fund)
   Columbia Emerging
Markets Fund
(Acquiring Fund)

Active Management Risk

   X    X

Capitalization (e.g., Small- and Mid-Cap and Large-Cap) Risk

   X    X

Common Stock Risk

   X    X

Convertible Securities Risk

      X

Currency Risk

   X    X^

Depositary Receipts Risk

      X

Emerging Markets Securities Risk

   X    X

Foreign Securities Risk

   X    X

Geographic Focus Risk

   X    X

- Asia Pacific Region

      X

- Greater China

      X

Issuer Risk

   X*    X

Liquidity Risk

      X

Market (e.g., Stock Market) Risk

   X    X

Preferred Stock Risk

      X

Sector Risk

   X    X

- Consumer Staples Sector Risk

   X   

- Consumer Discretionary Sector

      X

- Financial Services Sector Risk

   X    X

- Information Technology Sector

      X

Style (e.g., Growth) Risk

      X

Special Situations Risk

      X

Value Securities Risk

      X

 

^

The Acquiring Fund’s risk factor “Foreign Securities Risk” includes currency risk.

*

The Target Fund’s “Common Stock Risk” generally addresses risk considerations covered in the Acquiring Fund’s “Issuer Risk.”

 

-23-


Comparison of Management of the Funds. BMO AM serves as the investment adviser to BMO LGM Emerging Markets Equity Fund. BMO AM has entered into a subadvisory agreement with LGM Investments, an affiliate of BMO AM, pursuant to which the subadviser manages the Fund. Columbia serves as investment manager to Columbia Emerging Markets Fund providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO LGM Emerging Markets Equity Fund paid BMO AM an effective advisory fee of 0.90% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO LGM Emerging Markets Equity Fund into Columbia Emerging Markets Fund.” For the fiscal year ended August 31, 2020, Columbia Emerging Markets Fund paid Columbia an effective management fee of 1.03% of the Fund’s average daily net assets before any applicable reimbursements. Currently, BMO AM is responsible for subadvisory fees paid to LGM Investments. The table below shows the current contractual advisory/management fee schedule for each of the Funds. Columbia Emerging Markets Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO LGM Emerging Markets Equity Fund
(Target Fund)

    

Columbia Emerging Markets Fund

(Acquiring Fund)

 

Assets

   Fee     

Assets

   Fee  

Up to $500 million

     0.90%      Up to $500 million      1.100%  

Greater than $500 million up to $700 million

     0.89%      Greater than $500 million up to $1 billion      1.060%  

Greater than $700 million up to $800 million

     0.85%      Greater than $1 billion up to $1.5 billion      0.870%  

Greater than $800 million

     0.80%      Greater than $1.5 billion up to $3 billion      0.820%  
      Greater than $3 billion up to $6 billion      0.770%  
      Greater than $6 billion up to $12 billion      0.720%  
      Greater than $12 billion      0.700%  

Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Emerging Markets Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO LGM Emerging Markets Equity Fund and Columbia Emerging Markets Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show each Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices, as well as another measure of performance for markets in which Columbia Emerging Markets Fund may invest. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of Class Adv shares of Columbia Emerging Markets Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Emerging Markets Fund’s Class Inst shares, which are not shown in the table below, (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

 

 

-24-


The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

BMO LGM Emerging Markets Equity Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    17.93%

Worst

   First Quarter 2020    (26.44)%

 

*

Year-to-Date return as of June 30, 2021: 4.63%

 

-25-


Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
   1 Year    5 Years    10 Years    Since
Inception
(5/27/2014)

Class I

       12/22/2008                    

Returns before taxes

            13.10%        10.35%        2.78%        N/A

Returns after taxes on distributions

            12.50%        9.87%        2.35%        N/A

Returns after taxes on distributions and sale of Fund shares

            8.17%        8.23%        2.32%        N/A

Class A – Returns before taxes

       5/27/2014        7.17%        8.94%        N/A        4.60%

Morgan Stanley Capital International Emerging Markets Index (reflects reinvested dividends net of withholding taxes but reflects no deduction for fees, expenses or other taxes) (Net)

            18.31%        12.81%        3.63%        5.95%

Columbia Emerging Markets Fund Performance – Class Adv

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    28.22%

Worst

   First Quarter 2020    (25.12)%

 

*

Year-to-Date return as of June 30, 2021: 8.14%

 

-26-


Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
       1 Year        5 Years        10 Years  

Class Adv

     03/19/2013                 

Returns before taxes

          33.86%          16.33%          6.44%  

Returns after taxes on distributions

          33.54%          16.38%          6.36%  

Returns after taxes on distributions and sale of Fund shares

          20.34%          13.37%          5.32%  

Class A – Returns before taxes

     09/28/2007          25.82%          14.68%          5.55%  

MSCI Emerging Markets Index (Net) (reflects reinvested dividends net of withholding taxes but reflects no deductions for fees, expenses or other taxes)

          18.31%          12.81%          3.63%  

MSCI EAFE Index (Net) (reflects reinvested dividends net of withholding taxes but reflects no deductions for fees, expenses or other taxes)

          7.82%          7.45%          5.51%  

 

-27-


SYNOPSIS OF PROPOSAL 2: COMPARISON OF BMO MID-CAP GROWTH FUND AND COLUMBIA MID CAP GROWTH FUND

Overview. BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund:

 

 

Have similar investment objectives and are both diversified.

 

 

Have the same fiscal year end: August 31.

 

 

Are structured as series of separate open-end management investment companies. BMO Mid-Cap Growth Fund is organized as a series of a Wisconsin corporation. Columbia Mid Cap Growth Fund is organized as a series of a Massachusetts business trust.

 

 

Have different advisers. BMO AM is the investment adviser to BMO Mid-Cap Growth Fund. Columbia is the investment adviser to Columbia Mid Cap Growth Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund are set forth in the table below. Each Fund’s investment objective is non-fundamental and may be changed without shareholder approval.

Both BMO Mid-Cap Growth Fund’s and Columbia Mid Cap Growth Fund’s investment policies with respect to 80% of their respective total assets may be changed by the Fund’s Board without shareholder approval as long as shareholders are given 60 days’ advance written notice of the change.

The Funds have similar investment objectives; however, there are certain differences in the Funds’ principal investment strategies. Each Fund invests at least 80% of its total assets in equity securities of mid-sized companies. Columbia Mid Cap Growth Fund may invest in special situations, such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies, whereas BMO Mid-Cap Growth Fund does not invest in special situations as a principal investment strategy. In addition, BMO Mid-Cap Growth Fund does not invest in foreign securities as a principal investment strategy, while Columbia Mid Cap Growth Fund may invest up to 20% of its total assets in foreign securities.

 

    

BMO Mid-Cap Growth Fund

(Target Fund)

 

Columbia Mid Cap Growth Fund

(Acquiring Fund)

Investment Objective    The Fund seeks to provide capital appreciation.   The Fund seeks significant capital appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the Russell Midcap Index.
Principal Investment Strategies    The Fund invests at least 80% of its assets in growth-oriented common stocks of medium-sized U.S. companies similar in size, at the time of purchase, to those within the Russell Midcap® Growth Index. The largest company by market capitalization in the Russell Midcap® Growth Index was approximately $44.6 billion as of October 31, 2020 and the median market capitalization of   Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have market capitalizations in the range of the companies in the Russell Midcap Index (the

 

-28-


    

BMO Mid-Cap Growth Fund

(Target Fund)

 

Columbia Mid Cap Growth Fund

(Acquiring Fund)

   companies in the Index as of the same period was $11.2 billion.   “Index”) at the time of purchase (between $331.8 million and $60.4 billion as of November 30, 2020).
Sector Focus    The Fund may at times focus its investments in one or more sectors.   The Fund may from time to time emphasize one or more sectors in selecting its investments, including the health care and information technology sectors.
Foreign Securities      The Fund may invest up to 20% of its total assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Special Situations      The Fund may invest in special situations, such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. In selecting investments for BMO Mid-Cap Growth Fund, BMO AM:

 

 

selects stocks using a unique, growth-oriented approach focusing on high quality companies with sustainable earnings growth that are available at reasonable prices, which combines the use of proprietary analytical tools and the qualitative judgments of the investment team; and

 

 

integrates environmental, social, and governance (“ESG”) considerations into its investment process.

In general, BMO AM believes companies that are undervalued relative to their fundamentals and exhibit improving investor interest outperform the market over full market cycles. As a result, BMO AM’s investment process begins by using tools to rank stocks based on expected returns, construct preliminary portfolios with the use of fundamental factors, and manage risk. The entire process is designed to focus on company fundamentals through both quantitative and qualitative analysis to balance return generation with risk management. From time to time, BMO Mid-Cap Growth Fund maintains a portion of its assets in cash. The Fund may increase its cash holdings in response to market conditions or in the event attractive investment opportunities are not available.

In selecting investments for Columbia Mid Cap Growth Fund, Columbia selects common stocks of companies believed to have the potential for long-term, above-average earnings growth but may invest in companies for their short, medium or long-term prospects. The market capitalization range and composition of the companies in the Russell Midcap Index are subject to change. As such, the size of the companies in which the Fund invests may change. As long as an investment continues to meet the Fund’s other investment criteria, the Fund may choose to continue to hold a security even if the company’s market capitalization grows beyond the market capitalization of the largest company within the Russell Midcap Index or falls below the market capitalization of the smallest company within the Index. Columbia employs fundamental analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio. Columbia considers, among other factors:

 

 

overall economic and market conditions; and

 

 

the financial condition and management of a company, including its competitive position, the quality of its balance sheet and earnings, its future prospects, and the potential for growth and stock price appreciation.

 

-29-


Columbia may sell a security when the security’s price reaches a target set by the Investment Manager; if the Investment Manager believes that there is deterioration in the issuer’s financial circumstances or fundamental prospects; if other investments are more attractive; or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO Mid-Cap Growth Fund

(Target Fund)

 

Columbia Mid Cap Growth Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities except, as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.

 

-30-


Policy

  

BMO Mid-Cap Growth Fund

(Target Fund)

 

Columbia Mid Cap Growth Fund

(Acquiring Fund)

Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.   The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of its total assets in any one industry or industries, except as permitted by the SEC. However, investing in U.S. government securities shall not be considered investments in any one industry.   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

 

-31-


Policy

  

BMO Mid-Cap Growth Fund

(Target Fund)

 

Columbia Mid Cap Growth Fund

(Acquiring Fund)

Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.

Comparison of Principal Risks. Columbia Mid Cap Growth Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund are subject to many of the same principal risks, but such risks differ primarily due to Columbia Mid Cap Growth Fund’s greater ability to invest in foreign securities and its ability to invest in special situations and other types of equity securities such as convertible securities and depositary receipts and preferred securities. In addition, while some of the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO Mid-Cap
Growth Fund
(Target Fund)
  Columbia Mid Cap
Growth Fund
(Acquiring Fund)

Active Management Risk

   X   X

Capitalization (e.g., Mid Cap) Risk

   X   X

Convertible Securities Risk

     X

Common Stock Risk

   X   X

Depositary Receipts Risk

     X

Foreign Securities Risk

     X

Issuer Risk

   X^   X

Market (e.g., Stock Market) Risk

   X   X

Preferred Stock Risk

     X

Sector Risk

   X   X

- Health Care Sector

     X

- Information Technology Sector

   X   X

Style (e.g., Growth) Risk

   X   X

Special Situations Risk

     X

 

^

The Target Fund’s “Common Stock Risk” generally addresses risk considerations covered in the Acquiring Fund’s “Issuer Risk.”

Comparison of Management of the Funds.. BMO AM serves as the investment adviser to BMO Mid-Cap Growth Fund and supervises the management of the Fund’s investments and business affairs. Columbia serves as investment manager to Columbia Mid Cap Growth Fund, providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO Mid-Cap Growth Fund paid BMO AM an effective advisory fee of 0.69% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Mid-Cap Growth Fund into Columbia Mid Cap Growth Fund.” For the fiscal year ended August 31, 2020, Columbia Mid Cap Growth Fund paid Columbia an effective management fee of 0.76% of the

 

-32-


Fund’s average daily net assets before any applicable reimbursements. The table below shows the current contractual advisory/management fee schedule for each of the Funds. Columbia Mid Cap Growth Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO Mid-Cap Growth Fund (Target Fund)

    

Columbia Mid Cap Growth Fund (Acquiring Fund)

 

Assets

  Fee     

Assets

  Fee  

Up to $500 million

    0.685%      Up to $500 million     0.820%  

Greater than $500 million up to $700 million

    0.67%      Greater than $500 million up to $1 billion     0.770%  

Greater than $700 million up to $800 million

    0.57%      Greater than $1 billion up to $1.5 billion     0.720%  

Greater than $800 million

    0.51%      Greater than $1.5 billion up to $3 billion     0.670%  
     Greater than $3 billion up to $12 billion     0.660%  
     Greater than $12 billion     0.650%  

Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Mid Cap Growth Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO Mid-Cap Growth Fund and Columbia Mid Cap Growth Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show each Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices, as well as another measure of performance for markets in which Columbia Mid Cap Growth Fund may invest. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of Class Adv shares of Columbia Mid Cap Growth Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Mid Cap Growth Fund’s Class Inst shares, which are not shown in the table below, (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

 

-33-


BMO Mid-Cap Growth Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    33.36%

Worst

   First Quarter 2020    (24.50)%

 

*

Year-to-Date return as of June 30, 2021: 14.42%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception
Date
   1 Year    5 Years    10 Years    Since
Inception
(5/27/2014)

Class I

       1/31/2008                    

Returns before taxes

            28.17%        16.15%        11.61%        N/A

Returns after taxes on distributions

            14.41%        9.94%        7.32%        N/A

Returns after taxes on distributions and sale of Fund shares

            23.88%        11.25%        8.21%        N/A

Class A – Returns before taxes

       5/27/2014        21.43%        14.66%        N/A        10.08%

Class R6 – Returns before taxes

       5/27/2014        27.54%        16.17%        N/A        11.28%

Russell Midcap® Growth Index (reflects no deduction for fees, expenses or taxes)

            35.59%        18.66%        15.04%        15.26%

 

-34-


Columbia Mid Cap Growth Fund – Class Adv

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    29.04%

Worst

   First Quarter 2020    (21.24)%

 

*

Year-to-Date return as of June 30, 2021: 12.88%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
     1 Year      5 Years      10 Years  

Class Adv

     11/08/2012           

Returns before taxes

        35.26%        16.82%        13.07%  

Returns after taxes on distributions

        30.57%        13.40%        10.28%  

Returns after taxes on distributions and sale of Fund shares

        23.29%        12.54%        9.91%  

Class A – Returns before taxes

     11/01/2002        27.15%        15.15%        12.13%  

Class Inst3 – Returns before taxes

     7/15/2009        35.40%        16.97%        13.24%  

Russell Midcap Growth Index (reflects no deductions for fees, expenses or taxes)

        35.59%        18.66%        15.04%  

Russell Midcap Index (reflects no deductions for fees, expenses or taxes)

        17.10%        13.40%        12.41%  

 

-35-


SYNOPSIS OF PROPOSAL 3: COMPARISON OF BMO CORE PLUS BOND FUND AND COLUMBIA TOTAL RETURN BOND FUND

Overview. BMO Core Plus Bond Fund and Columbia Total Return Bond Fund:

 

 

Have similar investment objectives and are both diversified.

 

 

Have different fiscal year ends. BMO Core Plus Bond Fund’s fiscal year end is August 31 and Columbia Total Return Bond Fund’s fiscal year end is April 30.

 

 

Are structured as series of separate open-end management investment companies. BMO Core Plus Bond Fund is organized as a series of a Wisconsin corporation. Columbia Total Return Bond Fund is organized as a series of a Massachusetts business trust.

 

 

Have different advisers. BMO AM is the investment adviser to BMO Core Plus Bond Fund. Columbia is the investment adviser to Columbia Total Return Bond Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO Core Plus Bond Fund and Columbia Total Return Bond Fund are set forth in the table below. Each Fund’s investment objective is non-fundamental and may be changed without shareholder approval.

Both BMO Core Plus Bond Fund and Columbia Total Return Bond Fund’s investment policies with respect to 80% of their respective total assets may be changed by the Fund’s Board without shareholder approval as long as shareholders are given 60 days’ advance written notice of the change.

The Funds have similar investment objectives; however, there are certain differences in the Funds’ principal investment strategies. Each Fund invests at least 80% of its assets in bonds and other debt securities. BMO Core Plus Bond Fund maintains an average maturity of three to ten years, whereas Columbia Total Return Bond Fund expects to maintain an average maturity of +/- two years. In addition, BMO Core Plus Bond Fund may invest up to 20% of its assets in debt securities that are below investment grade, while Columbia Total Return Bond Fund may invest up to 35% of its net assets in such securities. Additionally, BMO Core Plus Bond Fund may invest up to 20% of its assets in non-U.S. dollar denominated foreign debt securities, whereas Columbia Total Return Bond Fund may also invest in non-U.S. debt securities, but does not have a similar limitation. Columbia Total Return Bond Fund notes the use of derivatives as part of its principal investment strategy, while BMO Core Plus Bond Fund does not.

 

    

BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

Investment Objective    The Fund seeks to maximize total return consistent with current income.   The Fund seeks total return, consisting of current income and capital appreciation.
Principal Investment Strategies    The Fund invests at least 80% of its assets in bonds. Fund investments include corporate, asset-backed, mortgage-backed and U.S. government securities. The Fund will invest primarily in securities with a minimum rating in the lowest investment grade category (i.e., rated BBB by Standard & Poor’s or Baa by Moody’s Investors Service, or higher, or unrated and considered by BMO AM to be comparable in quality) at the time of purchase.   Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in bonds, notes and other debt instruments, including derivatives relating to such investments.

 

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BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

Maturity   

The Fund normally maintains an average dollar-weighted effective maturity of three to ten years.

 

Effective maturity takes into account the possibility that a bond may have prepayments or may be called by the issuer before its stated maturity date.

  The Fund generally expects to maintain an effective duration of +/- two years relative to the Bloomberg U.S. Aggregate Bond Index.
Investments in “Junk Bonds”    The Fund may invest up to 20% of its assets in debt securities that are below investment grade, also known as high yield securities or “junk bonds.”   The Fund may invest up to 35% of its net assets in debt instruments that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as high-yield” investments or “junk” bonds).
Foreign Securities    While the Fund’s assets are predominantly U.S. dollar denominated, the Fund also may invest up to 20% of its assets in non-U.S. dollar denominated foreign debt securities, all or a portion of which may be emerging markets debt securities.   The Fund may invest in non-U.S. corporate or other non-governmental entities.
Government-Issued Securities    Fund’s investments include U.S. government securities.   The Fund may invest in debt instruments issued by U.S. and non-U.S. governments and their agencies.
Mortgage- and Other Asset-backed Securities    Fund investments include asset-backed and mortgage-backed securities.  

The Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.

 

The Fund’s investments in mortgage-related securities include investments in stripped mortgage-backed securities such as interest-only (IO) and principal-only (PO) securities.

Derivatives      The Fund may invest in derivatives, such as futures (including interest rate futures) and swaps (including credit default swaps, credit default swap indexes, and interest rate swaps) for hedging and investment purposes, and to manage interest rate and/or credit exposure of the Fund.
Rule 144A Securities      The Fund may invest in privately placed and other securities or instruments that are purchased and sold pursuant to Rule 144A or other exemptions under the Securities

 

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BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

     Act of 1933, as amended, subject to certain regulatory restrictions.
Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. BMO Core Plus Fund’s investment strategy is referred to as “Core Plus” because BMO AM has the ability to add high yield securities and emerging markets debt securities to a core portfolio of investment grade fixed income securities. In selecting investments for BMO Core Plus Bond Fund, BMO AM:

 

 

uses macroeconomic, credit, and market analysis to select portfolio securities; and

 

 

integrates environmental, social, and governance (“ESG”) considerations into its investment process.

From time to time, BMO Core Plus Fund maintains a portion of its assets in cash. BMO Core Plus Fund may increase its cash holdings in response to market conditions or in the event attractive investment opportunities are not available.

Columbia Total Return Bond Fund’s investment strategy may involve the frequent trading of portfolio securities. Columbia, in connection with selecting individual investments for Columbia Total Return Bond Fund evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. Columbia considers, among other factors:

 

 

the creditworthiness of the issuer and the various features of the instrument, such as its interest rate, yield, maturity, any call features and value relative to other investments; and

 

 

local, national and global economic conditions, market conditions, interest rate movements and other factors in allocating the Fund’s assets among issuers, security/investment types and industry sectors.

Columbia may sell an investment if Columbia believes that there is deterioration in the issuer’s financial circumstances, if other investments are more attractive, if there is deterioration in a security’s credit rating or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO Core Plus Bond and Columbia Total Return Bond Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit..   The Fund may not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

 

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Policy

  

BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.
Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets  

The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total

assets may be invested without regard to these limitations and (ii) the Fund’s assets

 

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Policy

  

BMO Core Plus Bond Fund

(Target Fund)

 

Columbia Total Return Bond Fund

(Acquiring Fund)

   would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.   may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of its total assets in any one industry or industries, except as permitted by the SEC. However, investing in U.S. government securities shall not be considered investments in any one industry.   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.

 

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Comparison of Principal Risks. Columbia Total Return Bond Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO Core Plus Bond Fund and Columbia Total Return Bond Fund are subject to many of the same principal risks, but such risks differ primarily due to Columbia Total Return Bond Fund’s stated principal investment strategy to invest in derivatives. In addition, while some of the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO Core Plus Bond
Fund
(Target Fund)
  Columbia Total
Return Bond Fund
(Acquiring Fund)

Active Management Risk

   X   X

Call Risk

   X  

Changing Distribution Level (e.g., Income) Risk

   X   X

Corporate Debt Securities Risk

   X  

Counterparty Risk

     X

Credit Risk

   X   X

Derivatives Risk

     X

- Derivatives Risk – Futures Contracts Risk

     X

- Derivatives Risk – Swaps Risk

     X

Emerging Markets Risk

   X  

Foreign Securities Risk

   X   X

Forward Commitments on Mortgage-Backed Securities (including Dollar Rolls) Risk

     X

Frequent Trading Risk

     X

High Yield Investments Risk

   X   X

Interest Rate Risk

   X   X

Issuer Risk

   X*   X

Leverage Risk

     X

LIBOR Replacement Risk

     X

Liquidity Risk

   X   X

Market Risk

     X

Mortgage- and Other Asset-Backed Securities Risk

   X   X

Prepayment and Extension Risk

   X^   X

Reinvestment (Income) Risk

   X   X

Rule 144A and Other Exempted Securities Risk

     X

Sovereign Debt Risk

     X

Stripped Mortgage-Backed Securities Risk

     X

U.S. Government Obligations Risk

   X   X

 

^

The Target Fund’s “Asset-Backed/Mortgaged-Backed Securities Risk” includes prepayment and extension risk.

*

The Target Fund’s “Corporate Debt Securities Risk” includes issuer risk.

Comparison of Management of the Funds. BMO AM serves as the investment adviser to BMO Core Plus Bond Fund and supervises the management of the Fund’s investments and business affairs. Columbia serves as investment manager to Columbia Total Return Bond Fund, providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO Core Plus Bond Fund paid BMO AM an effective advisory fee of 0.13% of the Fund’s average daily net assets. For the fiscal year ended April 30, 2021, Columbia Total Return Bond Fund paid Columbia an effective management fee of 0.48% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Core Plus Bond Fund into Columbia Total Return Bond Fund.” The table below shows the current contractual advisory/management fee schedule for each

 

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of the Funds. Columbia Total Return Bond Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO Core Plus Bond Fund
(Target Fund)

    

Columbia Total Return Bond Fund

(Acquiring Fund)

 

Assets

   Fee     

Assets

   Fee  

Up to $100 million

     0.25%      Up to $500 million      0.500%  

Greater than $100 million up to $250 million

     0.16%      Greater than $500 million up to $1 billion      0.495%  

Greater than $250 million up to $500 million

     0.12%      Greater than $1 billion up to $2 billion      0.480%  

Greater than $500 million

     0.10%      Greater than $2 billion up to $3 billion      0.460%  
     

Greater than $3 billion up to $6 billion

     0.450%  
     

Greater than $6 billion up to $7.5 billion

     0.430%  
     

Greater than $7.5 billion up to $9 billion

     0.415%  
     

Greater than $9 billion up to $12 billion

     0.410%  
     

Greater than $12 billion up to $20 billion

     0.390%  
     

Greater than $20 billion up to $24 billion

     0.380%  
     

Greater than $24 billion up to $50 billion

     0.360%  
     

Greater than $50 billion

     0.340%  

Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO Core Plus Bond Fund and Columbia Total Return Bond Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Total Return Bond Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO Core Plus Bond Fund and Columbia Total Return Bond Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show each Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of of Class Adv shares of Columbia Total Return Bond Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Total Return Bond Fund’s Class Inst shares, which are not shown in the table below, (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

 

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BMO Core Plus Bond Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    4.79%

Worst

   Second Quarter 2013    (2.96)%

 

*

Year-to-Date return as of June 30, 2021: (0.38)%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception
Date
   1 Year    5 Years    10 Years    Since
Inception
(5/27/2014)

Class I

       12/22/2008                    

Returns before taxes

            8.31%        5.71%        4.96%        N/A

Returns after taxes on distributions

            7.07%        4.33%        3.48%        N/A

Returns after taxes on distributions and sale of Fund shares

            4.90%        3.78%        3.22%        N/A

Class A – Returns before taxes

       5/27/2014        4.27%        4.72%        N/A        3.35%

Class Y – Returns before taxes

       12/22/2008        8.04%        5.46%        4.71%        N/A

Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)

            7.51%        4.44%        3.84%        3.78%

 

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Columbia Total Return Bond Fund – Class Adv

 

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    9.11%

Worst

   Second Quarter 2013    (2.66)%

 

*

Year-to-Date return as of June 30, 2021: 0.68%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception
Date
     1 Year      5 Years      10 Years  

Class Adv

     11/08/2012           

Returns before taxes

        12.20%        6.06%        4.73%  

Returns after taxes on distributions

        9.10%        4.23%        3.12%  

Returns after taxes on distributions and sale of Fund shares

        7.44%        3.89%        2.99%  

Class A – Returns before taxes

     07/31/2000        8.72%        5.12%        4.15%  

Bloomberg U.S. Aggregate Bond Index (reflects no deductions for fees, expenses or taxes)

        7.51%        4.44%        3.84%  

SYNOPSIS OF PROPOSAL 4: COMPARISON OF

BMO CORPORATE INCOME FUND AND COLUMBIA CORPORATE INCOME FUND

Overview. BMO Corporate Income Fund and Columbia Corporate Income Fund:

 

 

Have similar investment objectives and are both diversified; however Columbia Corporate Income Fund also includes capital appreciation as part of its investment objective.

 

 

Have different fiscal year ends. BMO Corporate Income Fund’s fiscal year end is August 31 and Columbia Corporate Income Fund’s fiscal year end is April 30.

 

 

Are structured as series of separate open-end management investment companies. BMO Corporate Income Fund is organized as a series of a Wisconsin corporation. Columbia Corporate Income Fund is organized as a series of a Massachusetts business trust.

 

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Have different advisers. BMO AM is the investment adviser to BMO Corporate Income Fund. Columbia is the investment adviser to Columbia Corporate Income Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO Corporate Income Fund and Columbia Corporate Income Fund are set forth in the table below. Each Fund’s investment objective is non-fundamental and may be changed without shareholder approval.

Both BMO Corporate Income Fund and Columbia Corporate Income Fund’s investment policies with respect to 80% of their respective total assets may be changed by the Fund’s Board without shareholder approval as long as shareholders are given 60 days’ advance written notice of the change.

The Funds have similar investment objectives; however, there are certain differences in the Funds’ principal investment strategies. Both Funds invest at least 80% of their respective assets in corporate debt securities. BMO Corporate Income Fund maintains an average maturity of between three to fifteen years, whereas Columbia Corporate Income Fund expects to maintain an average maturity of three and ten years. In addition, BMO Corporate Income Fund may invest up to 20% of its assets in debt securities that are below investment grade, while Columbia Corporate Income Fund may invest up to 25% of its net assets in such securities. Similarly, BMO Corporate Income Fund may invest up to 20% of its assets in non-U.S. dollar denominated foreign debt securities, whereas Columbia Corporate Income Fund may also invest in non-U.S. debt securities, but does not have a similar limitation. Finally, as part of its principal investment strategy, Columbia Corporate Income Fund may invest in derivatives, when-issued and delayed securities or private placements, whereas BMO Corporate Income Fund does not have a stated principal investment strategy to invest in those types of securities.

 

    

BMO Corporate Income Fund

(Target Fund)

 

Columbia Corporate Income Fund

(Acquiring Fund)

Investment Objective    The Fund seeks to maximize total return consistent with current income.   The Fund seeks total return, consisting primarily of current income and secondarily of capital appreciation.
Principal Investment Strategies    The Fund invests at least 80% of its assets in corporate debt securities, including convertible debt securities. The Fund will invest primarily in securities with a minimum rating in the lowest investment grade category (i.e., rated BBB by Standard & Poor’s or Baa by Moody’s Investors Service, or higher, or unrated and considered by BMO AM to be comparable in quality) at the time of purchase.   Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in debt securities issued by corporate and other non-governmental issuers, including dollar-denominated debt securities issued by foreign companies.
Maturity   

The Fund normally maintains an average dollar-weighted effective maturity of three to fifteen years.

 

Effective maturity takes into account the possibility that a bond may have prepayments or may be called by the issuer before its stated maturity date.

  Under normal circumstances, the Fund’s average effective duration will be between three and ten years.
Investments in “Junk Bonds”    The Fund may invest up to 20% of its assets in debt securities that are below investment grade, also known as high yield securities or “junk bonds.”   The Fund also invests at least 60% of total assets in securities that, at the time of purchase, are investment grade securities or

 

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BMO Corporate Income Fund

(Target Fund)

 

Columbia Corporate Income Fund

(Acquiring Fund)

    

in unrated securities determined to be of comparable quality.

 

The Fund may invest up to 25% of its total assets in debt instruments that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high-yield” investments or “junk” bonds).

Foreign Securities    The Fund may invest up to 20% of its assets in non-U.S. dollar denominated foreign debt securities.   The Fund may invest in debt securities of foreign companies.
Mortgage- and Other Asset-backed Securities    The Fund also may invest in U.S. government securities, asset-backed and mortgage-backed securities.   The Fund may invest in U.S. government obligations, asset-backed securities and mortgage-backed securities.
Derivatives      The Fund may invest in derivatives, such as futures (including interest rate futures), for hedging and non-hedging purposes.
When-Issued Securities      The Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis.
Rule 144A Securities      The Fund may invest in privately placed and other securities or instruments that are purchased and sold pursuant to Rule 144A or other exemptions under the Securities Act of 1933, as amended, subject to certain regulatory restrictions.
Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. In selecting investments for BMO Corporate Income Fund, BMO AM:

 

 

uses macroeconomic, credit, and market analysis to select portfolio securities; and

 

 

integrates environmental, social, and governance (“ESG”) considerations into its investment process.

From time to time, BMO Corporate Income Fund maintains a portion of its assets in cash. BMO Corporate Income Fund may increase its cash holdings in response to market conditions or in the event attractive opportunities are not available.

Columbia evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. Columbia:

 

 

considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors in allocating the Fund’s assets among issuers, securities, industry sectors and maturities;

 

 

evaluates a security based on its potential to generate income and/or capital appreciation;

 

 

the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, duration, yield, maturity, any call features and value relative to other securities.

 

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Columbia may sell a security if Columbia believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in a security’s credit rating; or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO Corporate Income Fund and Columbia Corporate Income Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO Corporate Income Fund

(Target Fund)

 

Columbia Corporate Income Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities except, as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.

 

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Policy

  

BMO Corporate Income Fund

(Target Fund)

 

Columbia Corporate Income Fund

(Acquiring Fund)

Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.   The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of its total assets in any one industry or industries, except as permitted by the SEC. However, investing in U.S. government securities shall not be considered investments in any one industry.   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

 

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Policy

  

BMO Corporate Income Fund

(Target Fund)

 

Columbia Corporate Income Fund

(Acquiring Fund)

Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.

Comparison of Principal Risks. Columbia Corporate Income Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO Corporate Income Fund and Columbia Corporate Income Fund are subject to many of the same principal risks, but such risks differ primarily due to Columbia Corporate Income Fund’s stated principal investment strategies to invest in other types of securities such as derivatives, when-issued and delayed securities or private placements. In addition, while some of the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO Corporate Income
Fund
(Target Fund)
  Columbia Corporate
Income Fund
(Acquiring Fund)

Active Management Risk

       X       X

Call Risk

       X    

Changing Distribution Level (e.g., Income) Risk

       X       X

Corporate Debt Securities Risk

       X    

Counterparty Risk

           X

Credit Risk

       X       X

Derivatives Risk

           X

- Derivatives Risk – Futures Contracts Risk

           X

Foreign Securities Risk

       X       X

High-Yield Investments Risk

       X       X

Issuer Risk

       X *        X

Interest Rate Risk

       X       X

Liquidity Risk

       X       X

Market Risk

           X

Mortgage- and Other Asset-Backed Securities Risk

       X       X

Prepayment and Extension Risk

       X ^        X

Reinvestment (Income) Risk

       X       X

Rule 144A and Other Exempted Securities Risk

           X

U.S. Government Obligations Risk

       X       X

 

^

The Target Fund’s “Asset-Backed/Mortgaged-Backed Securities Risk” includes prepayment and extension risk.

*

The Target Fund’s “Corporate Debt Securities Risk” includes issuer risk.

Comparison of Management of the Funds. BMO AM serves as the investment adviser to BMO Corporate Income Fund and supervises the management of the Fund’s investments and business affairs. Columbia serves as investment manager to Columbia Corporate Income Fund, providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund

 

-49-


should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO Corporate Income Fund paid BMO AM an effective advisory fee of 0.18% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Corporate Income Fund into Columbia Corporate Income Fund.” For the fiscal year ended April 30, 2021, Columbia Corporate Income Fund paid Columbia an effective management fee of 0.49% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Corporate Income Fund into Columbia Corporate Income Fund.” The table below shows the current contractual advisory/management fee schedule for each of the Funds. Columbia Corporate Income Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO Corporate Income Fund

(Target Fund)

    

Columbia Corporate Income Fund

(Acquiring Fund)

 

Assets

  Fee     

Assets

  Fee  

Up to $100 million

    0.20%      Up to $500 million     0.500%  

Greater than $100 million up to $250 million

    0.19%      Greater than $500 million up to $1 billion     0.495%  

Greater than $250 million up to $500 million

    0.15%      Greater than $1 billion up to $2 billion     0.480%  

Greater than $500 million

    0.10%      Greater than $2 billion up to $3 billion     0.460%  
     Greater than $3 billion up to $6 billion     0.450%  
     Greater than $6 billion up to $7.5 billion     0.430%  
     Greater than $7.5 billion up to $9 billion     0.415%  
     Greater than $9 billion up to $12 billion     0.410%  
     Greater than $12 billion up to $20 billion     0.390%  
     Greater than $20 billion up to $24 billion     0.380%  
     Greater than $24 billion up to $50 billion     0.360%  
     Greater than $50 billion     0.340%  

Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO Corporate Income Fund and Columbia Corporate Income Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Corporate Income Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO Corporate Income Fund and Columbia Corporate Income Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show BMO Corporate Income Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices, and Columbia Corporate Income Fund’s returns for the periods shown compared with a blended index that is intended to provide a measure of the Fund’s performance given its investment strategy, as well as another measure of performance for markets in which the Fund may invest. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of Class Adv shares of Columbia Corporate Income Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Corporate Income Fund’s Class Inst shares, which are not shown in the table below, (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

 

 

-50-


The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

BMO Corporate Income Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    10.02%

Worst

   First Quarter 2020    (5.18)%

 

*

Year-to-Date return as of June 30, 2021: (0.82)%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
   1 Year    5 Years    10 Years    Since
Inception
5/27/2014

Class I

       12/22/2008          

Returns before taxes

            10.94%        8.21%        6.29%        N/A

Returns after taxes on distributions

            9.40%        6.60%        4.59%        N/A

Returns after taxes on distributions and sale of Fund shares

            6.53%        5.66%        4.18%        N/A

Class A – Returns before taxes

       5/27/2014        6.81%        7.27%        N/A        4.93%

Class Y – Returns before taxes

       12/22/2008        10.72%        8.04%        6.14%        N/A

Bloomberg U.S. Credit Index (reflects no deduction for fees, expenses or taxes)

            9.35%        6.43%        5.40%        5.06%

 

-51-


Columbia Corporate Income Fund – Class Adv

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    10.33%

Worst

   First Quarter 2020    (4.35)%

 

*

Year-to-Date return as of June 30, 2021: (0.80)%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception
Date
     1 Year      5 Years      10 Years  

Class Adv

     11/08/2012     

Returns before taxes

        11.31%        7.31%        5.75%  

Returns after taxes on distributions

        8.87%        5.76%        4.11%  

Returns after taxes on distributions and sale of Fund shares

        7.18%        5.03%        3.80%  

Class A – Returns before taxes

     07/31/2000        5.72%        6.03%        4.97%  

Blended Benchmark (consisting of 85% Bloomberg U.S. Corporate Bond Index and 15% ICE BofA U.S. Cash Pay High Yield Constrained Index) (reflects no deduction for fees, expenses or taxes)

        9.35%        7.01%        5.79%  

Bloomberg U.S. Corporate Bond Index (reflects no deductions for fees, expenses or taxes)

        9.89%        6.74%        5.63%  

 

-52-


SYNOPSIS OF PROPOSAL 5: COMPARISON OF BMO INTERMEDIATE TAX-FREE FUND AND COLUMBIA INTERMEDIATE MUNICIPAL BOND FUND

Overview. BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund:

 

 

Have similar investment objectives and are both diversified.

 

 

Have different fiscal year ends. BMO Intermediate Tax-Free Fund’s fiscal year end is August 31 and Columbia Intermediate Municipal Bond Fund’s fiscal year end is October 31.

 

 

Are structured as series of separate open-end management investment companies. BMO Intermediate Tax-Free Fund is organized as a series of a Wisconsin corporation. Columbia Intermediate Municipal Bond Fund is organized as a series of a Massachusetts business trust.

 

 

Have different advisers. BMO AM is the investment adviser to BMO Intermediate Tax-Free Fund. Columbia is the investment adviser to Columbia Intermediate Municipal Bond Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund are set forth in the table below. BMO Intermediate Tax-Free Fund’s investment objective is non-fundamental and may be changed without shareholder approval. Columbia Intermediate Municipal Bond Fund’s investment objective is fundamental and may not be changed without shareholder approval.

BMO Intermediate Tax-Free Fund’s and Columbia Intermediate Municipal Bond Fund’s investment policy to invest at least 80% of the respective Fund’s assets in securities, the income from which is exempt from U.S. federal income tax (including the federal AMT) is fundamental and may only be changed by a vote of the majority of the outstanding voting securities of a Fund.

The Funds have similar investment objectives and principal investment strategies. Both Funds invest at least 80% of their assets in municipal securities exempt from federal income tax (including the federal alternative minimum tax (AMT)) and maintain similar maturity policies. Both Funds also may invest up to 10% of their respective assets in debt securities that are below investment grade, also known as high yield securities or “junk bonds.” Columbia Intermediate Municipal Bond Fund’s ability to invest up to 20% of its net assets in securities that pay interest subject to U.S. federal income tax (including federal AMT) is stated as part of its principal investment strategy, while BMO Intermediate Tax-Free Fund does not include such stated principal investment strategy.

 

    

BMO Intermediate Tax-Free Fund

(Target Fund)

 

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

Investment Objective    The Fund to provide a high level of current income exempt from federal income tax consistent with preservation of capital.   The Fund seeks current income exempt from federal income tax, consistent with preservation of principal.
Principal Investment Strategies    The Fund invests at least 80% of its assets in municipal securities, the income from which is exempt from federal income tax (including the federal alternative minimum tax (AMT)). Municipal securities include debt obligations of states, territories, and possessions of the U.S. and political subdivisions, and financing authorities of these entities that provide income exempt from federal income tax (although not necessarily exempt from federal AMT).  

Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in municipal securities that pay interest exempt from U.S. federal income tax (including the federal alternative minimum tax (AMT)).

 

These securities are issued by or on behalf of states and their political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers and by funds that

 

-53-


    

BMO Intermediate Tax-Free Fund

(Target Fund)

 

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

  

 

Fund investments include municipal securities with a minimum rating in the lowest investment grade category (i.e., rated BBB by Standard & Poor’s or Baa by Moody’s Investors Service, or higher, or unrated and considered by the Adviser to be comparable in quality) at the time of purchase.

  invest in such securities. Qualified issuers include issuers located in U.S. territories, commonwealths and possessions, such as Guam, Puerto Rico and the U.S. Virgin Islands.
Maturity   

The Fund normally maintains an average dollar-weighted effective maturity of three to ten years.

 

Effective maturity takes into account the possibility that a bond may have prepayments or may be called by the issuer before its stated maturity date.

  While the Fund may invest in securities of any maturity, under normal circumstances, the Fund’s dollar-weighted average maturity will be between three and ten years.
Investments in “Junk Bonds”    The Fund also may invest up to 10% of its assets in municipal securities that are below investment grade, also known as high yield securities or “junk bonds.”  

The Fund normally invests at least 80% of its total assets in municipal securities that, at the time of purchase, are rated investment grade or are unrated but determined by the management team to be of comparable quality.

 

The Fund may invest up to 10% of its total assets in debt instruments that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high-yield” investments or “junk” bonds).

Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. In selecting investments for BMO Intermediate Tax-Free Fund, BMO AM:

 

 

Assesses factors such as the cyclical trend in interest rates, the shape of the municipal yield curve, tax rates, sector valuation, and municipal bond supply factors; and

 

 

integrates environmental, social, and governance (“ESG”) considerations into its investment process.

From time to time, the BMO Intermediate Tax-Free Fund maintains a portion of its assets in cash. The Fund may increase its cash holdings in response to market conditions or in the event attractive investment opportunities are not available.

Columbia evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. Columbia:

 

 

considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors in allocating the Fund’s assets among issuers, securities, industry sectors and maturities;

 

 

evaluates a security based on its potential to generate income and/or capital appreciation;

 

-54-


 

the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, duration, yield, maturity, any call features and value relative to other securities.

Columbia may sell a security if Columbia believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in a security’s credit rating; or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO Intermediate Tax-Free Fund

(Target Fund)

 

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.

 

-55-


Policy

  

BMO Intermediate Tax-Free Fund

(Target Fund)

 

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.^   The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of the value of its total assets in any one industry, except that the Fund may invest 25% or more of the value of its total assets in cash or cash items, securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, and repurchase agreements collateralized by such securities for temporary defensive purposes. In addition, the Fund may invest more than 25% of the value of its total assets in obligations issued by any state, territory, or possession of the United States; the District of Columbia; or any of their authorities, agencies, instrumentalities, or political subdivisions, including tax-exempt project notes guaranteed by the U.S. government, regardless of the location of the issuing municipality. This policy applies to securities that are related in such a way that an economic, business, or political   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

 

-56-


Policy

  

BMO Intermediate Tax-Free Fund

(Target Fund)

 

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

   development affecting one security would also affect the other securities (such as securities paid from revenues from selected projects in transportation, public works, education, or housing).  
Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
Tax Exempt Obligations    The Fund invests, under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in securities the income from which is exempt from federal income tax, including the federal AMT.   Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in municipal securities that pay interest exempt from U.S. federal income tax (including the federal AMT).

 

^

Under this limitation, BMO Intermediate Tax-Free Fund will consider each governmental subdivision, including states and the District of Columbia, territories, possessions of the United States or their political subdivisions, agencies, authorities, instrumentalities, or similar entities, a separate issuer if its assets and revenues are separate from those of the governmental body creating it and the security is backed only by its own assets and revenues. Industrial developments bonds backed only by the assets and revenues of a non-governmental user are considered to be issued solely by that user. If, in the case of an industrial development bond or government-issued security, a governmental or some other entity (such as a bank that issues a letter of credit) guarantees the security, such guarantee or letter of credit would be considered a separate security issued by the guarantor or other entity, subject to a limit on investments in the guarantor of 10% of total assets. Where a security is insured by bond insurance, the security shall not be considered a security issued or guaranteed by the insurer. Instead, the issuer of such security will be determined in accordance with the first and second sentences of this paragraph. The foregoing 10% restriction does not limit the percentage of BMO Intermediate Tax-Free Fund’s assets that may be invested in securities insured by any single insurer.

 

-57-


Comparison of Principal Risks. Columbia Intermediate Municipal Bond Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund are subject to many of the same principal risks. In addition, while the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO Intermediate Tax-
Free Fund
(Target Fund)
   Columbia Intermediate
Municipal Bond Fund
(Acquiring Fund)

Active Management Risk

   X    X

Call Risk

   X   

Changing Distribution Level (e.g., Income) Risk

   X    X

Credit Risk

   X    X

High-Yield Investments Risk

   X    X

Interest Rate Risk

   X    X

Liquidity Risk

   X    X

Market Risk

      X

Municipal Securities Risk

   X    X

Prepayment and Extension Risk

      X

Reinvestment (Income) Risk

   X    X

Sector Risk

   X   

Tax Risk

      X

Comparison of Management of the Funds. BMO AM serves as the investment adviser to BMO Intermediate Tax-Free Fund and supervises the management of the Fund’s investments and business affairs. Columbia serves as investment manager to Columbia Intermediate Municipal Bond Fund, providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO Intermediate Tax-Free Fund paid BMO AM an effective advisory fee of 0.12% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Intermediate Tax-Free Fund into Columbia Intermediate Municipal Bond Fund.” For the fiscal year ended October 31, 2020, Columbia Intermediate Municipal Bond Fund paid Columbia an effective management fee of 0.47% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Intermediate Tax-Free Fund into Columbia Intermediate Municipal Bond Fund.” The table below shows the current contractual advisory/management fee schedule for each of the Funds. Columbia Intermediate Municipal Bond Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO Intermediate Tax-Free Fund

(Target Fund)

    

Columbia Intermediate Municipal Bond Fund

(Acquiring Fund)

 

Assets

  Fee     

Assets

  Fee  

Up to $100 million

    0.25%      Up to $500 million     0.480%  

Greater than $100 million up to $250 million

    0.16%      Greater than $500 million up to $1 billion     0.475%  

Greater than $250 million up to $500 million

    0.12%      Greater than $1 billion up to $2 billion     0.445%  

Greater than $500 million

    0.10%      Greater than $2 billion up to $3 billion     0.420%  
     Greater than $3 billion up to $6 billion     0.385%  
     Greater than $6 billion up to $9 billion     0.360%  
     Greater than $9 billion up to $10 billion     0.350%  
     Greater than $10 billion up to $12 billion     0.340%  
     Greater than $12 billion up to $15 billion     0.330%  
     Greater than $15 billion up to $24 billion     0.320%  
     Greater than $24 billion up to $50 billion     0.300%  
     Greater than $50 billion     0.290%  

 

-58-


Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Intermediate Municipal Bond Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO Intermediate Tax-Free Fund and Columbia Intermediate Municipal Bond Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show each Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of Class Adv shares of Columbia Intermediate Municipal Bond Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Intermediate Municipal Bond Fund’s Class Inst shares, which are not shown in the table below, (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

BMO Intermediate Tax-Free Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2011    3.05%

Worst

   Fourth Quarter 2016    (3.21)%

 

*

Year-to-Date return as of June 30, 2021: 1.99%

 

-59-


Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
   1 Year    5 Years    10 Years    Since
Inception
5/27/2014

Class I

   12/27/2010          

Returns before taxes

          3.94%        3.38%        4.15%        N/A

Returns after taxes on distributions

          3.94%        3.35%        4.12%        N/A

Returns after taxes on distributions and sale of Fund shares

          3.50%        3.24%        3.89%        N/A

Class A – Returns before taxes

   5/27/2014        0.04%        2.41%        N/A        2.67%

Class Y – Returns before taxes

   2/1/1994        3.70%        3.13%        3.94%        N/A

Bloomberg 1-15 Year Blend Municipal Bond Index (reflects no deduction for fees, expenses or taxes)

          4.73%        3.39%        3.83%        3.33%

Columbia Intermediate Municipal Bond Fund – Class Adv

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2011    3.61%

Worst

   Fourth Quarter 2016    (3.37)%

 

*

Year-to-Date return as of June 30, 2021: 1.23%

 

-60-


Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception
Date
     1 Year      5 Years      10 Years  

Class Adv

     03/19/2013     

Returns before taxes

        4.05%        3.11%        3.85%  

Returns after taxes on distributions

        3.94%        3.07%        3.83%  

Returns after taxes on distributions and sale of Fund shares

        3.66%        3.10%        3.75%  

Class A – Returns before taxes

     11/25/2002        0.60%        2.26%        3.32%  

Bloomberg 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)

        5.04%        3.59%        4.12%  

 

-61-


SYNOPSIS OF PROPOSAL 6: COMPARISON OF BMO STRATEGIC INCOME FUND AND COLUMBIA STRATEGIC INCOME FUND

Overview. BMO Strategic Income Fund and Columbia Strategic Income Fund:

 

 

Have similar investment objectives and are both diversified; however Columbia Strategic Income Fund also includes capital appreciation as part of its investment objective.

 

 

Have the same fiscal year end: August 31.

 

 

Are structured as series of separate open-end management investment companies. BMO Strategic Income Fund is organized as a series of a Wisconsin corporation. Columbia Strategic Income Fund is organized as a series of a Massachusetts business trust.

 

 

Have different advisers. BMO AM is the investment adviser to BMO Strategic Income Fund. Columbia is the investment adviser to Columbia Strategic Income Fund.

Comparison of Investment Objectives, Principal Investment Strategies and Non-Fundamental Investment Policies. The investment objectives and principal investment strategies of BMO Strategic Income Fund and Columbia Strategic Income Fund are set forth in the table below. Each Fund’s investment objective is non-fundamental.

The Funds have similar investment objectives; however, there are certain differences in the Funds’ principal investment strategies. Each Fund invests at least 80% of its assets in debt securities. BMO Strategic Income Fund may invest up to 65% of its assets in debt securities rated below investment grade, whereas Columbia Strategic Income Fund may also invest in debt securities rated below investment grade, but does not have a similar limitation. In addition, BMO Strategic Income Fund may invest up to 10% of its assets in common stocks, while Columbia Strategic Income Fund does not invest in equity securities as part of its principal investment strategies. Similarly, Columbia Strategic Income Fund may invest in derivatives and preferred securities, whereas BMO Strategic Income Fund does not invest in those types of securities as part of its principal investment strategies.

 

    

BMO Strategic Income Fund

(Target Fund)

 

Columbia Strategic Income Fund

(Acquiring Fund)

Investment Objective    The Fund seeks to maximize total return consistent with current income.   The Fund seeks total return, consisting of current income and capital appreciation.
Principal Investment Strategies    The Fund invests primarily in U.S. and foreign debt securities, including those in emerging markets. Debt securities include all types of fixed and floating rate securities, including high yield securities (junk bonds), investment grade corporate bonds, U.S. Treasury, agency and municipal securities and foreign government securities, including inflation-indexed securities of U.S. and non-U.S. government, convertible securities, preferred securities and mortgage-backed and asset-backed securities.   Under normal circumstances, the Fund has substantial exposure to fixed-income/debt markets. The Fund has the flexibility to invest in any sector of the fixed-income/debt market and across the credit quality spectrum. The Fund may invest in U.S. government bonds and notes (including those of its agencies and instrumentalities, and of government-sponsored enterprises), U.S. and international (including developed, developing and emerging markets) bonds and notes, investment grade corporate (or similar) bonds and notes, mortgage- and other asset-backed securities, high yield (i.e., “junk”) instruments, floating rate loans and other floating rate debt securities, inflation-protected/linked securities, convertible securities, cash/cash equivalents, as well as foreign government,

 

-62-


    

BMO Strategic Income Fund

(Target Fund)

 

Columbia Strategic Income Fund

(Acquiring Fund)

     sovereign and quasi-sovereign debt investments. The Fund may invest in interest-only (IO) and principal-only (PO) bonds (commonly known as stripped securities) for investment purposes.
Maturity    The Fund may invest without limitation in fixed and floating rate debt securities of any maturity.   The Fund does not seek to maintain a particular dollar-weighted average maturity or duration target.
Investments in “Junk Bonds”   

The Fund may invest up to 65% of its net assets in debt securities rated below investment grade.

 

Below investment grade, or high yield, securities are commonly referred to as “junk bonds.” Investment grade securities are: securities rated BBB- or higher by Standard & Poor’s Ratings Services (S&P) or Baa3 or higher by Moody’s Investors Service, Inc. (Moody’s) or an equivalent rating by another nationally recognized statistical rating organization (NRSRO), or unrated securities determined by the Adviser to be of comparable quality.

  The Fund may invest in high yield (i.e., “junk”) instruments.
Foreign Securities   

The Fund may invest without limitation in fixed and floating rate debt securities of any geography.

 

While the Fund’s assets are predominantly U.S. dollar denominated, the Fund also may invest up to 25% of its assets in foreign currency denominated debt securities, all or a portion of which may be emerging markets debt securities.

  The Fund’s investments may include non-U.S. dollar denominated instruments.
Preferred Securities      The Fund may also invest in preferred securities.
Equity Securities    The Fund may invest up to 10% of its assets in common stocks; however, most common stocks generally will be acquired from conversions of convertible bonds or as residual interests from other fixed income securities.  
Derivatives      The Fund may invest in derivatives, such as forward contracts (including forward foreign currency contracts for investment and hedging purposes), futures (including bond futures for managing yield curve and duration risk, and index and interest rate futures for hedging and investment purposes), options (including options on

 

-63-


    

BMO Strategic Income Fund

(Target Fund)

 

Columbia Strategic Income Fund

(Acquiring Fund)

     listed futures for hedging purposes), options on swaps (commonly known as swaptions) for hedging purposes, and swaps (including credit default swaps, credit default swap indexes, inflation rate and interest rate swaps for hedging purposes, and total return swaps for investment purposes). The Fund’s use of derivatives creates leverage (market exposure in excess of the Fund’s assets) in the Fund’s portfolio.
When-Issued Securities      The Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
Rule 144A Securities      The Fund may invest in privately placed and other securities or instruments that are purchased and sold pursuant to Rule 144A or other exemptions under the Securities Act of 1933, as amended, subject to certain regulatory restrictions.
Diversification    The Fund is diversified.   The Fund is diversified.

Additional Information About Principal Investment Strategies. In selecting investments for BMO Strategic Income Fund, BMO AM integrates environmental, social, and governance (“ESG”) considerations into its investment process. From time to time, the Fund maintains a portion of its assets in cash. The Fund may increase its cash holdings in response to market conditions or in the event attractive investment opportunities are not available.

Columbia evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. Columbia:

 

 

considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors in allocating the Fund’s assets among issuers, securities, industry sectors and maturities;

 

 

evaluates a security based on its potential to generate income and/or capital appreciation; and

 

 

considers the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, duration, yield, maturity, any call features and value relative to other securities.

Columbia may sell a security if Columbia believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in a security’s credit rating; or for other reasons.

Comparison of Fundamental Investment Policies. Both BMO Strategic Income Fund and Columbia Strategic Income Fund have adopted certain fundamental investment policies. Each Fund’s fundamental investment restrictions are substantially similar. Fundamental investment policies cannot be changed without the

 

-64-


approval of the holders of a majority of the outstanding shares of the applicable Fund. The term “majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of a Fund’s outstanding shares, whichever is less.

 

Policy

  

BMO Strategic Income Fund

(Target Fund)

 

Columbia Strategic Income Fund

(Acquiring Fund)

Issuing Senior Securities    The Fund will not issue senior securities, except as the 1940 Act, any rule, regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Borrowing Money    The Fund will not borrow money, except as the 1940 Act, any rule regulation or exemptive order thereunder, or any SEC staff interpretation thereof, may permit.   The Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Lending Cash or Securities    The Fund will not lend any of its securities, or make any other loan, in excess of one-third of the value of the Fund’s total assets. This restriction shall not prevent the Fund from purchasing or holding U.S. government obligations, money market instruments, variable rate demand notes, bonds, debentures, notes, certificates of indebtedness, or other debt securities, entering into repurchase agreements, or engaging in other transactions where permitted by the Fund’s investment goal, policies, and limitations.   The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Investing in Commodities    The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other instruments and provided that this restriction will not prevent the Fund from (i) purchasing or selling futures contracts, options, and other derivative instruments or (ii) investing in securities or other instruments backed by physical commodities.   The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts, and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts.
Investing in Real Estate    The Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction shall not prevent the Fund from investing in (i) securities of issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein or (ii) securities or other instruments backed by real estate or interests therein.   The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.

 

-65-


Policy

  

BMO Strategic Income Fund

(Target Fund)

 

Columbia Strategic Income Fund

(Acquiring Fund)

Diversification    With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities issued by any one issuer (other than cash, cash items, or securities issued or guaranteed by the government of the United States or its agencies or instrumentalities, repurchase agreements collateralized by such securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer or if it would own more than 10% of the outstanding voting securities of such issuer.   The Fund may not purchase securities (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief.
Concentration    The Fund will not invest 25% or more of its total assets in any one industry or industries, except as permitted by the SEC. However, investing in U.S. government securities shall not be considered investments in any one industry.   The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
Underwriting    The Fund will not underwrite securities of other issuers, except to the extent it may be deemed to be an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of portfolio securities.   The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.

 

-66-


Comparison of Principal Risks. Columbia Strategic Income Fund is subject to the principal risks described in “Section D – Additional Information Applicable to the Acquiring Funds” below. BMO Strategic Income Fund and Columbia Strategic Income Fund are subject to many of the same principal risks, but such risks differ primarily due to Columbia Strategic Income Fund’s stated principal investment strategy covering investments in derivatives and other types of debt securities as described above as well as BMO Strategic Income Fund’s stated principal investment strategy to invest in equity securities. In addition, while the risk factors attributable to the Funds are similar, they are presented in a different manner by each Fund due to differing practices between the two fund complexes.

 

Principal Risks

   BMO Strategic Income
Fund
(Target Fund)
  Columbia Strategic
Income Fund
(Acquiring Fund)

Active Management Risk

       X       X

Call Risk

       X    

Changing Distribution Level (e.g., Income) Risk

       X       X

Convertible Securities Risk

           X

Corporate Debt Securities Risk

       X    

Counterparty Risk

           X

Credit Risk

       X       X

Derivatives Risk

           X

- Derivatives Risk – Forward Contracts Risk

           X

- Derivatives Risk – Futures Contracts Risk

           X

- Derivatives Risk – Options Risk

           X

- Derivatives Risk – Swaps Risk

           X

- Derivatives Risk – Swaptions Risk

           X

Emerging Market Securities Risk

       X       X

Foreign Securities Risk

       X       X

Forward Commitments on Mortgage-Backed Securities (including Dollar Rolls) Risk

           X

Frequent Trading Risk

           X

High-Yield Investments Risk

       X       X

Impairment of Collateral Risk

           X

Inflation-Protected Securities Risk

           X

Interest Rate Risk

       X       X

Issuer Risk

       X *       X

Leverage Risk

           X

LIBOR Replacement Risk

           X

Liquidity Risk

       X       X

Loan Interests Risk

           X

Market Risk

           X

Mortgage- and Other Asset-Backed Securities Risk

       X       X

Preferred Stock Risk

           X

Prepayment and Extension Risk^

       X       X

Reinvestment (Income) Risk

       X       X

Repurchase Agreements Risk

       X    

Rule 144A and Other Exempted Securities Risk

           X

Sovereign Debt Risk

           X

Stripped Securities Risk

           X

U.S. Government Obligations Risk

       X       X

 

^

The Target Fund’s “Asset-Backed/Mortgaged-Backed Securities Risk” includes prepayment and extension risk.

*

The Target Fund’s “Corporate Debt Securities Risk” includes issuer risk.

 

-67-


Comparison of Management of the Funds. BMO AM serves as the investment adviser to BMO Strategic Income Fund and supervises the management of the Fund’s investments and business affairs. Columbia serves as investment manager to Columbia Strategic Income Fund, providing the Fund with investment research and advice, as well as administrative and accounting services. In its capacity as investment manager, Columbia manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. For the fiscal year ended August 31, 2020, BMO Strategic Income Fund paid BMO AM an effective advisory fee of 0.25% of the Fund’s average daily net assets before giving effect to the fee waiver described in more detail under “Summary – Fees and Expenses – Reorganization of BMO Strategic Income Fund into Columbia Strategic Income Fund.” For the fiscal year ended August 31, 2020, Columbia Strategic Income Fund paid Columbia an effective management fee of 0.557% of the Fund’s average daily net assets before any applicable reimbursements. The table below shows the current contractual advisory/management fee schedule for each of the Funds. Columbia Strategic Income Fund’s management fee schedule will apply following completion of the Reorganization.

 

BMO Strategic Income Fund

(Target Fund)

    

Columbia Strategic Income Fund

(Acquiring Fund)

 

Assets

  Fee     

Assets

  Fee  

Up to $100 million

    0.25%      Up to $500 million     0.600%  

Greater than $100 million up to $250 million

    0.20%      Greater than $500 million up to $1 billion     0.590%  

Greater than $250 million up to $500 million

    0.20%      Greater than $1 billion up to $2 billion     0.575%  

Greater than $500 million

    0.20%      Greater than $2 billion up to $3 billion     0.555%  
     Greater than $3 billion up to $6 billion     0.530%  
     Greater than $6 billion up to $7.5 billion     0.505%  
     Greater than $7.5 billion up to $9 billion     0.490%  
     Greater than $9 billion up to $10 billion     0.481%  
     Greater than $10 billion up to $12 billion     0.469%  
     Greater than $12 billion up to $15 billion     0.459%  
     Greater than $15 billion up to $20 billion     0.449%  
     Greater than $20 billion up to $24 billion     0.433%  
     Greater than $24 billion up to $50 billion     0.414%  
     Greater than $50 billion     0.393%  

Each Fund is governed by its Board, which is responsible for overseeing the Fund. For a listing of members of the BMO Funds Board and the Columbia Funds Board, please refer to the Statement of Additional Information for the relevant Fund. BMO Strategic Income Fund and Columbia Strategic Income Fund have different portfolio management teams. “Section D – Additional Information Applicable to the Acquiring Funds” below describes the employment history of the portfolio managers of Columbia Strategic Income Fund. The Statement of Additional Information for each Fund provides additional information about portfolio manager compensation, other accounts managed and ownership of each Fund’s shares.

Comparison of Performance. Historical performance information for BMO Strategic Income Fund and Columbia Strategic Income Fund is set forth below. The following bar charts and tables provide some indication of the risks of investing in the Funds. The bar charts show the volatility or variability of each Fund’s annual total returns over time and show that each Fund’s performance can change from year to year. The tables show each Fund’s average annual total returns for certain time periods compared to the returns of broad-based securities market indices, as well as three additional measures of performance for markets in which Columbia Strategic Income Fund may invest. Past performance (before and after tax) is not necessarily an indication of how either Fund will perform in the future. The maximum Class A sales charge for each Fund, which is normally deducted when you purchase shares, is included in the average annual total returns in the tables below. The performance of Class Adv shares of Columbia Strategic Income Fund shown in the table below begins before the indicated inception date for such share class. The returns for each such share class include the returns of Columbia Strategic Income Fund’s Class A shares (adjusted to reflect the higher class-related operating expenses of such share classes, where applicable) for periods prior to its inception date.

 

-68-


The after-tax returns shown in the Average Annual Total Returns tables below are calculated using the highest historical individual U.S. federal marginal income tax rates in effect during the period indicated in the table and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-advantaged accounts such as 401(k) plans or Individual Retirement Accounts (IRAs).

BMO Strategic Income Fund – Class I

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    12.84%

Worst

   First Quarter 2020    (11.52)%

 

*

Year-to-Date return as of June 30, 2021: 2.56%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
   1 Year    5 Years    10 Years    Since
Inception

5/27/2014

Class I

       5/31/2007          

Returns before taxes

            10.65%        5.90%        4.41%        N/A

Returns after taxes on distributions

            8.63%        4.08%        2.79%        N/A

Returns after taxes on distributions and sale of Fund shares

            6.21%        3.70%        2.69%        N/A

Class A – Returns before taxes

       5/27/2014        6.55%        4.90%        N/A        4.26%

Class Y – Returns before taxes

       12/13/1992        10.37%        5.66%        4.16%        N/A

Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)

            7.51%        4.44%        3.84%        3.78%

 

-69-


Columbia Strategic Income Fund – Class Adv

 

LOGO

Best and Worst Quarterly Returns During the Period Shown in the Bar Chart

 

Best

   Second Quarter 2020    10.33%

Worst

   First Quarter 2020    (10.06)%

 

*

Year-to-Date return as of June 30, 2021: 2.20%

Average Annual Total Returns (for periods ended December 31, 2020)

 

     Share Class
Inception Date
     1 Year      5 Years      10 Years  

Class Adv

     11/08/2012     

Returns before taxes

        7.49%        6.19%        5.29%  

Returns after taxes on distributions

        5.86%        4.45%        3.37%  

Returns after taxes on distributions and sale of Fund shares

        4.36%        3.99%        3.27%  

Class A – Returns before taxes

     04/21/1977        2.07%        4.91%        4.58%  

Bloomberg U.S. Aggregate Bond Index (reflects no deductions for fees, expenses or taxes)

        7.51%        4.44%        3.84%  

ICE BofA US Cash Pay High Yield Constrained Index (reflects no deductions for fees, expenses or taxes)

        6.10%        8.39%        6.60%  

FTSE Non-U.S. World Government Bond (All Maturities) Index – Unhedged (reflects no deductions for fees, expenses or taxes)

        10.78%        5.17%        1.88%  

JPMorgan Emerging Markets Bond Index – Global (reflects no deductions for fees, expenses or taxes)

        5.88%        6.84%        5.97%  

 

-70-


ADDITIONAL INFORMATION ABOUT THE REORGANIZATIONS

Terms of Each Reorganization. Each of the BMO Funds Board and the Columbia Funds Board has approved the Agreement. While shareholders are encouraged to review the Agreement, which has been filed with the SEC as an exhibit to the registration statement of which this Combined Proxy Statement/Prospectus is a part, the following is a summary of certain terms of the Agreement:

 

 

Each Reorganization is expected to occur in the fourth quarter of 2021 or the first quarter of 2022, subject to approval by applicable Target Fund shareholders, receipt of any necessary regulatory approvals and satisfaction of any other conditions to closing. However, following such approvals, each Reorganization may happen at any time agreed to by the applicable Target Fund and the applicable Acquiring Fund.

 

 

Each Target Fund will transfer all of its assets to the corresponding Acquiring Fund and, in exchange, the Acquiring Fund will (a) assume (i) all liabilities and obligations of the Target Fund reflected on a Statement of Assets and Liabilities prepared as of the close of regular trading on the NYSE on the Valuation Date (as defined below) in accordance with generally accepted accounting principles consistently applied from the prior audit period, and (ii) any obligation of the Target Fund to indemnify a BMO Funds director under the Target Company’s Articles of Incorporation and By-Laws, so long as such BMO Funds director shall have exercised commercially reasonable efforts to maximize recovery from the insurance coverage described in the Agreement before seeking to assert any claim against an Acquiring Fund, and (b) issue Acquisition Shares to the Target Fund. (The assumed liabilities and obligations of the Target Fund in the foregoing sentence, as defined in the Agreement, are referred to hereafter as the “Target Fund’s Obligations.”) As soon as practicable after the closing, each Target Fund will liquidate and distribute pro rata to its shareholders of record of each class of its shares the Acquisition Shares of the corresponding class received by the Target Fund.

 

 

The value of the net assets of the Target Fund and of the Acquisition Shares to be issued in a Reorganization will be computed as of the close of regular trading on the NYSE on the business day immediately preceding the closing date of such Reorganization (the “Valuation Date”). Under the Agreement, at the Closing, the net asset value of your Target Fund shares will be determined pursuant to the Acquiring Fund’s valuation procedures, which differ in certain respects from the Target Fund’s valuation procedures. The impact of these differences on the net asset value of your shares at the time of a Reorganization is uncertain, and could be positive or negative depending on market conditions at such time as this determination is made, and the positive or negative impact could exceed $0.01 per share of a Fund’s net asset value. The per share net asset value of Target Fund shares, as so determined, will be used to calculate the number of Acquiring Fund Shares issued to you in the Reorganization. The aggregate net asset value of your Target Fund shares, as so determined at the close of regular trading on the NYSE on the Valuation Date, will equal the aggregate net asset value of the Acquiring Fund shares received in the Reorganization.

 

 

As a result, shareholders of the Target Fund will become shareholders of the Acquiring Fund. Shareholders will not incur any sales charges, redemption fee, commission or other transactional fee in connection with receiving Acquisition Shares in the Reorganization.

Conditions to Closing Each Reorganization. In order for a Reorganization to be completed, all closing conditions must be satisfied or waived. If shareholders approve a Reorganization, but other conditions are not satisfied or waived, the Reorganization will not be completed. The completion of each Reorganization is subject to certain conditions described in the Agreement, including among others:

 

 

At or prior to the close of regular trading on the NYSE on the Valuation Date, the Target Fund shall have declared and paid a dividend or dividends that, together with all previous dividends, shall have the effect of distributing all of the Target Fund’s investment company taxable income (computed without regard to the deduction for dividends paid), net tax-exempt income and net realized capital gains, if any, to the shareholders of the Target Fund for all taxable periods ending on or before the closing date of the Reorganization (after reduction for any available capital loss carryforwards and excluding any net capital gains on which the Target Fund paid U.S. federal income tax).

 

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The Target Fund and the Acquiring Fund will have received any approvals, consents or exemptions from the SEC or any other regulatory body necessary to carry out the Reorganization.

 

 

A registration statement on Form N-14 relating to the Reorganization will have been filed with the SEC and become effective.

 

 

The shareholders of the Target Fund will have approved the Agreement (and related amendment to the Target Company’s articles of incorporation) by the requisite vote.

 

 

As a non-waivable condition to closing, the Target Fund and the Acquiring Fund will have received a satisfactory opinion of tax counsel to the effect that, as described in more detail below, among other things, the shareholders of the Target Fund will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Target Fund shares for the Acquisition Shares of the Acquiring Fund in connection with the Reorganization and the Acquiring Fund will not recognize gain or loss for U.S. federal income tax purposes as a direct result of the Reorganization.

 

 

Bank of Montreal and any person controlling, controlled by or under common control with the Bank of Montreal shall hold shares of the applicable Acquiring Fund, immediately following the closing of a Reorganization, of less than (i) 3% with respect to each of Columbia Total Return Bond Fund and Columbia Strategic Income Fund, (ii) 4% with respect to Columbia Mid Cap Growth Fund, and (iii) 19% with respect to each of Columbia Emerging Markets Fund, Columbia Corporate Income Fund and Columbia Intermediate Municipal Bond Fund. If the ownership of Bank of Montreal or any person controlling, controlled by or under common control with Bank of Montreal would exceed the threshold set forth above and this closing condition is not otherwise waived, such Target Fund will not be reorganized into the corresponding Acquiring Fund, independent of the shareholder vote obtained with respect to the proposed Reorganization. Instead, the BMO Funds Board would consider alternatives to the proposed Reorganization with respect to such Target Fund.

Termination of the Agreement. The Agreement and the transactions contemplated by it may be terminated with respect to any Reorganization by mutual agreement of the Target Company and the Acquiring Trust at any time prior to the closing thereof, or by either the Target Company or the Acquiring Trust in the event of a material breach of the Agreement by the other party or a failure of any condition precedent to the terminating party’s obligations under the Agreement. In the event of a termination of a Reorganization, costs associated with that Reorganization will be borne by BMO AM and Columbia as agreed to between the parties.

U.S. Federal Income Tax Status of the Reorganizations. Each Reorganization is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). As a condition to the closing of each Reorganization, the Target Fund and the Acquiring Fund will receive an opinion from Vedder Price P.C. substantially to the effect that, on the basis of existing provisions of the Code, U.S. Treasury regulations issued thereunder, current administrative rules, pronouncements and court decisions, and certain representations, qualifications and assumptions with the respect to the Reorganization, for U.S. federal income tax purposes:

 

 

The transfer by the Target Fund of all its assets to the Acquiring Fund solely in exchange for Acquisition Shares and the assumption by the Acquiring Fund of all of the Target Fund’s Obligations, immediately followed by the pro rata, by class, distribution of all the Acquisition Shares so received by the Target Fund to the Target Fund’s shareholders of record in complete liquidation of the Target Fund and the dissolution and termination of the Target Fund as soon as practicable thereafter, will constitute a “reorganization” within the meaning of Section 368(a)(1) of the Code, and the Target Fund and the Acquiring Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code, with respect to the Reorganization.

 

 

No gain or loss will be recognized by the Acquiring Fund upon the receipt of all the assets of the Target Fund solely in exchange for Acquisition Shares and the assumption by the Acquiring Fund of all of the Target Fund’s Obligations.

 

 

No gain or loss will be recognized by the Target Fund upon the transfer of all its assets to the Acquiring Fund solely in exchange for Acquisition Shares and the assumption by the Acquiring Fund of all of the

 

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Target Fund’s Obligations or upon the distribution (whether actual or constructive) of the Acquisition Shares so received to the Target Fund’s shareholders solely in exchange for such shareholders’ shares of the Target Fund in complete liquidation of the Target Fund.

 

 

No gain or loss will be recognized by the Target Fund’s shareholders upon the exchange, pursuant to the Agreement, of all their shares of the Target Fund solely for Acquisition Shares.

 

 

The aggregate basis of the Acquisition Shares received by each Target Fund shareholder pursuant to the Agreement will be the same as the aggregate basis of the Target Fund shares exchanged therefor by such shareholder.

 

 

The holding period of the Acquisition Shares received by each Target Fund shareholder in the Reorganization will include the period during which the shares of the Target Fund exchanged therefor were held by such shareholder, provided such Target Fund shares were held as capital assets at the effective time of the Reorganization.

 

 

The basis of the assets of the Target Fund received by the Acquiring Fund will be the same as the basis of such assets in the hands of the Target Fund immediately before the effective time of the Reorganization.

 

 

The holding period of the assets of the Target Fund received by the Acquiring Fund will include the period during which such assets were held by the Target Fund.

 

 

The Acquiring Fund will succeed to and take into account the items of the Target Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the Treasury regulations thereunder.

No opinion will be expressed as to (a) the effect of a Reorganization on a Target Fund, an Acquiring Fund or any Target Fund shareholder with respect to any asset (including without limitation any stock held in a passive foreign investment company as defined in Section 1297(a) of the Code) as to which any gain or loss is required to be recognized under U.S. federal income tax principles (i) at the end of a taxable year or on the termination thereof, or (ii) upon the transfer of such asset regardless of whether such transfer would otherwise be a non-taxable transaction under the Code, or (b) any other U.S. federal tax issues (except those set forth above) and any state, local or foreign tax issues of any kind.

No private letter ruling will be sought from the Internal Revenue Service (the “IRS”) with respect to the U.S. federal income tax consequences of a Reorganization. Opinions of counsel are not binding upon the IRS or the courts, are not guarantees of the tax results, and do not preclude the IRS from adopting or taking a contrary position, which may be sustained by a court. If a Reorganization were consummated but the IRS or the courts determine that the Reorganization did not qualify as a tax-free reorganization under the Code, the applicable Target Fund would recognize gain or loss on the transfer of its assets to an Acquiring Fund and each shareholder of the applicable Target Fund would recognize a taxable gain or loss for U.S. federal income tax purposes equal to the difference between its tax basis in its Target Fund shares and the fair market value of the Acquisition Shares it received. Shareholders of a Target Fund should consult their tax advisers regarding the effect, if any, of the Reorganization in light of their individual circumstances.

A portion of the portfolio assets of each Target Fund is expected to be sold by the Target Fund prior to its Reorganization. The actual tax effect of any such sales depends on the difference between the price at which such portfolio assets are sold and the tax basis in such assets and the holding period of such assets. Any capital gains recognized in these sales on a net basis, after reduction by any available capital loss carryforwards, will be distributed to shareholders as capital gain dividends (to the extent of net long-term capital gains over net short-term capital losses) and/or ordinary dividends (to the extent of net short-term capital gains over net long-term capital losses) during or with respect to the year of sale, and such distributions will be taxable to shareholders. Each Reorganization will end the tax year of the applicable Target Fund, and potentially will accelerate any distributions to shareholders from the Target Fund for its tax year ending on the date of the Reorganization. Those tax year-end distributions may be taxable and will include any undistributed income and capital gains resulting from portfolio turnover prior to the Reorganization.

 

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More generally, prior to the closing of each Reorganization, each Target Fund will declare and pay a distribution to its shareholders, which, together with all previous distributions, will have the effect of distributing to its shareholders all of its investment company taxable income (computed without regard to the deduction for dividends paid), net tax-exempt income, if any, and realized net capital gains (after reduction for available capital loss carryforwards and excluding certain capital gains on which the Target Fund paid U.S. federal income tax), if any, through the closing date of the Reorganization, and may include undistributed income or gains from prior years. Even if reinvested in additional shares of the Target Fund, which would be exchanged for shares of the corresponding Acquiring Fund in the Reorganization, such distributions may be taxable to shareholders for U.S. federal income tax purposes, and such distributions by the Target Fund will include any undistributed net income and net capital gains resulting from portfolio turnover prior to the Reorganization.

A Fund’s ability to carry forward capital losses and to use them to offset future gains may be limited as a result of its Reorganization. First, a Target Fund’s “pre-acquisition losses” (including capital loss carryforwards, net current-year capital losses, and unrealized losses that exceed certain thresholds) may become unavailable to offset gains of the Acquiring Fund after the Reorganization to the extent such pre-acquisition losses exceed an annual limitation amount. Second, one Fund’s pre-acquisition losses cannot be used to offset gains in another Fund that are unrealized (“built in”) at the time of the Reorganization and that exceed certain thresholds (“non-de minimis built-in gains”) for five tax years. Third, a Target Fund’s capital loss carryforwards, as limited under the previous two rules, are permitted to offset only that portion of the capital gains of the Acquiring Fund for the taxable year of the Reorganization that is equal to the portion of the Acquiring Fund’s taxable year that follows the date of the Reorganization (prorated according to number of days). Therefore, in certain circumstances, shareholders of a Fund may pay U.S. federal income tax sooner, or pay more U.S. federal income tax, than they would have had the Reorganization not occurred.

In addition, shareholders of a Target Fund will in each case receive a proportionate share of any taxable income and gains realized by the corresponding Acquiring Fund and not distributed to its shareholders prior to the Reorganization when such income and gains are eventually distributed by the Acquiring Fund. Furthermore, any gain an Acquiring Fund realizes after its Reorganization, including any built-in gain in the portfolio investments of the corresponding Target Fund or the Acquiring Fund that was unrealized at the time of the Reorganization, may result in taxable distributions to shareholders holding shares of the Acquiring Fund (including former shareholders of a Target Fund who hold shares of the corresponding Acquiring Fund following a Reorganization). As a result, shareholders of a Target Fund may receive a greater amount of taxable distributions than they would have had its Reorganization not occurred. In addition, any pre-acquisition losses of a Target Fund remaining after the operation of the limitation rules described above will become available to offset capital gains realized by the corresponding Acquiring Fund after the Reorganization and thus may reduce subsequent capital gain distributions to a broader group of shareholders than would have been the case absent such Reorganization, such that the benefit of those losses to Target Fund shareholders may be further reduced relative to what the benefit would have been had the Reorganization not occurred.

The realized and unrealized gains and losses of each Fund at the time of the Reorganizations will determine the extent to which the combining Funds’ respective losses will be available to reduce gains realized by an Acquiring Fund following the Reorganization, and consequently the extent to which an Acquiring Fund may be required to distribute gains to its shareholders earlier or in greater amounts than would have been the case absent the Reorganization. The effect of the rules described above will depend on the relative sizes of, and the losses and gains (both realized and unrealized) in, each Fund at the time of the Reorganization and thus cannot be calculated precisely prior to the Reorganization.

 

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As April 30, 2021, the Target Funds and the Acquiring Funds had the following net unrealized gain:

 

Fund

   Net Unrealized Gain

BMO LGM Emerging Markets Equity Fund

     $ 80,634,291

BMO Mid-Cap Growth Fund

     $ 7,388,807

BMO Core Plus Bond Fund

     $ 39,876,881

BMO Corporate Income Fund

     $ 21,314,469

BMO Intermediate Tax-Free Fund

     $ 132,324,662

BMO Strategic Income Fund

     $ 3,171,345

Columbia Emerging Markets Fund

     $ 1,010,801,162

Columbia Mid Cap Growth Fund

     $ 625,084,088

Columbia Total Return Bond Fund

     $ 50,709,807

Columbia Corporate Income Fund

     $ 23,808,625

Columbia Intermediate Municipal Bond Fund

     $ 88,627,829

Columbia Strategic Income Fund

     $ 192,494,604

As April 30, 2021, the Funds had capital loss carryforwards as follows:

 

Fund

   Total Capital Loss Carryforwards

BMO LGM Emerging Markets Equity Fund

     $ 11,800,022

BMO Mid-Cap Growth Fund

      

BMO Core Plus Bond Fund

      

BMO Corporate Income Fund

      

BMO Intermediate Tax-Free Fund

     $ 31,284,204

BMO Strategic Income Fund

     $ 1,844,906

Columbia Emerging Markets Fund

      

Columbia Mid Cap Growth Fund

      

Columbia Total Return Bond Fund

      

Columbia Corporate Income Fund

      

Columbia Intermediate Municipal Bond Fund

      

Columbia Strategic Income Fund

      

 

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Capitalization. The following tables show the capitalization of each Target Fund and each corresponding Acquiring Fund as of the dates indicated and on a pro forma basis, assuming the proposed Reorganizations had taken place as of the dates indicated.

Proposal 1: Reorganization of BMO LGM Emerging Markets Equity Fund into Columbia Emerging Markets Fund as of February 28, 2021

 

Fund

  Net Assets(2), (3)     Net Asset Value
Per Share