Average annual total returns (%)
		1-Year				5-Years				10-Years				Since Inception
Advisor Class (A) NAV			20.56				6.96								5.41
Advisor Class (A) OFFER			14.54				5.86								4.67
Institutional Class (I)			20.85				7.24				4.54				8.38
Morgan Stanley Capital International Emerging Markets Index			21.12				10.40				4.85				4.85
Lipper Emerging Markets Funds Index			24.30				11.00				5.50				5.50

 

*	Cumulative for periods less than one year. Benchmarks since inception reflect the inception date of the Institutional Class.

The performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original costs. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. To receive current performance to the most recent month-end, please call 1-800-236-3863 or visit www.bmofunds.com.

Commentary

The BMO LGM Emerging Markets Equity Fund (the Fund) returned 20.85% for the fiscal year ended August 31, 2021 versus the Morgan Stanley Capital International Emerging Markets Index and the Lipper Emerging Markets Funds Index, which returned 21.12% and 24.30%, respectively.

COVID has continued to play a very significant role in 2021, where outbreaks in different countries have required various levels of containment measurements. In April, India saw a major outbreak with peak daily cases of over 410k while Indonesia has struggled in the past number of weeks to reduce infection rates. Thailand (so reliant on tourism) more recently has seen case loads shoot up. Even in places where containment has been successful throughout the pandemic (Taiwan and Korea) have seen outbreaks which required swift action. All of this tells us that we are far from the end of the COVID pandemic and the impacts it can have on share prices and economic activity.

China has been the main story of 2021. Surprise at regulatory interventions in China created a much weaker tone, particularly in July. Thus far, we have seen interventions in the internet sector (monopoly power, cyber security, data and privacy), food delivery (labor conditions), property management (excessive charging), on-line gaming (child protection) and education & tutoring (social imbalances). The last of these interventions was notably chilling, with the Chinese Communist Party (CCP) effectively banning foreign capital and forcing the incumbent operators to adopt a “not-for-profit” model. Leading listed names like Tal Education and New Oriental Education saw their share prices collapse 70-75% during the month (the portfolio has not had direct exposure to education-related names).

Security selections in China/Hong Kong added to relative value, though given the volatility, some portfolio holdings were also among the chief stock level detractors in the period. Elsewhere, exposures in India positively contributed to relative returns where positions in IT Service companies were notable. Positioning in Taiwan and Korea, where the portfolio is underweight for both, detracted most from an allocation perspective given Taiwan and Korea continued to be among the strongest performing markets in the period.

Anta Sports was the top contributor to performance. Anta is a leading sports apparel producer in China. Anta continued to deliver strong sales and earnings numbers, building traction with its multi-brand strategy in China and benefiting from the adoption of healthier lifestyle choices across China. Improving health outcomes has been a strategic goal of the central government, well before the outbreak of COVID. Exercise will play a key role in this strategy and Anta is well positioned with its leading brands to benefit.

IT Service company Infosys in India was a top contributor in the period. The company is a multinational IT firm providing business consulting, information technology and outsourcing services. Given the digital transformation witnessed in the past 18 months due to COVID and the widespread move to working from home, demand for reliable, experienced, resourced and innovative service providers increased dramatically.

As noted, Chinese names were prominent among the top and bottom contributors at a stock level. Yili was the largest detractor in the period. It is the largest Dairy producer in China (and by that fact in the world). Consumption of dairy remains low across China and Yili has a significant opportunity in this sense.

Investment Adviser:

BMO Asset Management Corp.

Sub-adviser:

LGM Investments Limited

Fund Managers; Investment Experience

Irina Hunter; since 1994

Rishikesh Patel; since 2003

 

Inception date

Expenses (%)

Share class

Ticker

Cusip

Gross

Net

Advisor (A)

BAEMX

09658W824

5/27/2014

1.51

1.40

Institutional (I)

MIEMX

09658L489

12/22/2008

1.26

1.15

The above expense ratios are from the Funds’ Prospectus dated December 29, 2020 and are inclusive of Acquired Fund Fees and Expenses. See Note 5 in the Notes to Financial Statements for additional information. Net expense ratios reflect contractual fee waivers and/or expense reimbursements if applicable, made by BMO Asset Management Corp., the investment adviser (Adviser). The Adviser may not terminate these fee waivers and/or expense reimbursements prior to December 31, 2022 without the consent of the Board of Directors, unless the investment advisory agreement is terminated. Without these contractual waivers, the Fund’s returns would have been lower.

 

Portfolio sector allocation
Sector		Fund (%)
Communication Services			9.5
Consumer Discretionary			6.6
Consumer Staples			23.5
Energy			3.2
Financials			22.1
Healthcare			6.6
Industrials			2.1
Information Technology			22.3
Utilities			1.5
Other Assets & Liabilities, Net			2.6
Total			100.0

Portfolio composition will change due to the ongoing management of the Fund. The percentages are based on net assets as of August 31, 2021 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement processes.

Growth of an assumed $10,000 investment

 

See Explanation of the Indices and Notes in the Commentary for additional information. The above graph relates to the Institutional Class shares of the Fund. Performance for the Advisor Class shares will vary from the performance of the Institutional Class shares shown above due to differences in charges and expenses. This graph illustrates the hypothetical investment of $10,000 in the Institutional Class shares of the Fund from the lesser of the Fund’s inception date or August 31, 2011 to August 31, 2021.