BMO Investments Review

BMO Investments Product Range

In the UK, BMO offers the following product ranges:

• Individual Savings Accounts (ISA)
• Junior Individual Savings Account (JISA)
• General Investment Account
• Junior Investment Account
• Child Trust Fund

Unlike other asset managers and investment platforms, BMO only offers investments through its trusts.

If you’re not familiar, the investment trusts used by BMO are investment companies listed on the London Stock Exchange (London Stock Exchange). An Investment Trust is a portfolio managed by BMO’s professional managers. All the investment trusts available within BMO are UK-authorised Investment Trusts or overseas closed-ended investment companies. All ten are listed on the LSE, regardless of their domicile.

BMO has ten investment trusts:

• European Assets Trust
• BMO Capital and Income Investment Trust
• BMO UK High Income Trust
• BMO Global Smaller Companies
• BMO Managed Portfolio Trust
• BMO Private Equity Trust
• F&C Investment Trust
• BMO Commercial Property Trust
• BMO Real Estate Investments
• TR Property Investment Trust

Research Services & Tools

Because all investments occur through one of BMO’s trusts, there’s no active trading on your part. As a result, you won’t find much in the way of research services and tools from BMO’s site.

The only education the platform offers is a news feed, complete with articles and videos, that explains current trends, reviews markets, and provides limited insight into trading. You’ll also find a glossary of terms that cover investing basics.

BMO also doesn’t offer financial advice. Instead, the Investing Reviews recommends seeking an Independent Financial Adviser.

Fees & Charges

The fees and charges for the Stocks and Shares ISA include:

• £60 + VAT – annual charge
• 0.2% – dealing charge
• 0.5% – government stamp duty on UK shares

The £60 + VAT annual account charge is equivalent to 0.33% if you’re investing the full £20,000 allowance each year.

Non-Leveraged products

BMO’s trusts contain non-leveraged products. You can invest in a range of equities, bonds, private equity, and property depending on the trust you choose.

Leveraged Products

BMO doesn’t offer leveraged products within its trusts.

BMO Investments ISA

The BMO ISA offers the same features found in any ISA. It’s a tax-wrapper account that allows you to invest up to £20,000 tax-free during the tax year.

When you invest in a BMO ISA, you invest in one of BMO’s ten funds. BMO’s fund managers then make all the decisions on your behalf.

Choosing funds is simple. Whether you choose the ISA or GIA, you can split your investments across multiple trusts. This allows you to be conservative with part of your investment pot and take greater risks with a smaller portion. In other words, it allows you to tailor your investment strategy, despite only investing in individual trusts.

You then watch it all happen on the BMO dashboard. The dashboard provides:

• Up-to-date valuations
• Fund switching tool
• Up-to-date documents

BMO also offers an app for iOS to monitor your investments.

BMO Investments Trusts

BMO’s trusts are its biggest selling point, and it’s quick to tout the funds’ performance. We won’t cover performance numbers here, as they change more frequently than the trust details. You can find all the charts and figures on BMO GAM’s website.

The full list includes:

• European Assets Trust
• BMO Capital and Income Investment Trust
• BMO UK High Income Trust
• BMO Global Smaller Companies
• BMO Managed Portfolio Trust
• BMO Private Equity Trust
• F&C Investment Trust
• BMO Commercial Property Trust
• BMO Real Estate Investments
• TR Property Investment Trust

European Assets Trust

The European Assets Trust is a trust located in the Netherlands with shares sold on the LSE as well as the Euronext Amsterdam Stock Market.

It has no one-off costs but the ongoing costs are as follows:

• 0.16% portfolio transaction costs
• 1.07% other ongoing costs

The European Assets Trust is rated a 3 on BMO’s scale of 1-7 with 1 being lower risk and 7 being higher risk.

BMO Capital and Income Investment Trust

The BMO Capital and Income Investment Trust PLC is a closed-end investment company based in England and listed on the LSE. The portfolio is largely shares of FTSE-All-Share Index listed companies. The fund managers may invest a maximum of 10% of the value in shares on the Alternative Investment Market.

BMO classifies the Capital and Income Investment Trust as a 4, which makes it a medium risk class product.

The ongoing costs include:

• 0.05% portfolio transaction costs
• 0.77% other ongoing costs

BMO High Income Trust

The BMO High Income Trust PLC is a closed-end investment company registered in Scotland and listed on the LSE. When you invest in this trust, your money largely stays in UK equities (ordinary shares) and equity-related securities.

BMO rates the trust as a 3, which is a medium lost risk class.

The cost of investment includes two ongoing costs:

• 0.31% portfolio transaction costs
• 1.22% other ongoing costs

There is also a B Shares as well as a Units offering in this portfolio. The costs and risk are the same.

BMO Global Smaller Companies

The BMO Global Smaller Companies PLC trust is a closed-ended investment company situated in England and listed on the LSE.

When you choose this trust, you invest in small companies across the world. The goal is to generate a high total return by investing in a wide range of companies to build a diversified portfolio.

BMO rates the Global Smaller Companies trust as a 4 on its scale, which makes it a medium risk investment.

The fees include:

• 0.08% portfolio transaction costs
• 1.07% other ongoing costs

BMO Managed Portfolio Trust- Growth Shares

The BMO Managed Portfolio Trust PLC is a closed-end investment company registered in Scotland and listed on the LSE.

The trust includes a diverse portfolio of companies across sectors and regions. It invests in a minimum of 25 investment companies, and most of the holdings are ordinary shares.

BMO rates the trust as a 3 out of 7, which is a medium low risk class.

Ongoing annual costs include:

• 0.07% portfolio transaction costs
• 2.16% other ongoing costs

You can also invest in the Income Shares version of the trust. It carries the same risk (3) and similar ongoing fees:

• 0.05% portfolio transaction costs
• 2.29% other ongoing costs

BMO Private Equity Trust

The BMO Private Equity Trust is a public limited liability company registered in Scotland and traded on the LSE. It aims to grow investors capital through privacy equity asset investment. The goal is to provide both an above average but also predictable dividend.

Investment mix is varied: 15% non-UK listed investment companies; 50% direct private equity co-investments, 5% in any one direct investment/co-investment; 10% outside the US, UK, and Europe.

BMO rates the trust as 4, which makes it medium risk.

It is a more expensive fund. Ongoing costs include:

• 0.08% portfolio transaction costs
• 3.18% other ongoing costs
• You also pay performance fees of 0.67%.

F&C Investment Trust

The F&C Investment Trust is a holdover from the F&C days. The board hasn’t yet agreed to rebrand and retitle to BMO. It is a closed-end investment company registered in England and listed on the LSE.

When you invest in this trust, you get access to internationally diversified publicly-listed securities. There are no exposure limits on the portfolio. Additionally, the investment managers may use derivatives to enhance incomes and make the management more efficient.

BMO says this portfolio is designed for professionally-advised private clients who are able to take on a high risk of loss for a potential higher return. BMO rates it a 4, which is medium risk.

The costs are relatively low compared to other trusts:

• 0.13% portfolio transaction costs
• 0.99% other ongoing costs

BMO Commercial Property Trust

The BMO Commercial Property Trust (formerly the F&C Commercial Property Trust) is a closed-ended property investment company listed in Guernsey. It provides you with the chance to invest in commercial property opportunities that are otherwise out of reach for the ordinary shareholder.

The investment mix is usually: 50% office, 65% retail, 40% industrial.

The BMO Commercial Property Trust is a 4 on BMO’s risk scale, which makes it a medium risk class trust.

The ongoing annual costs include:

• 0.09% portfolio transaction costs
• 2.28% other ongoing costs

BMO Real Estate Investments

The BMO Real Estate Investments Trust is the rebranded F&C UK Real Estate Investments trust. It is a closed-ended property investment company listed in Guernsey.

As the company title suggests, the trust invests shareholders money into diverse UK property portfolio. The investment mix is 60% office, 60% retail, and 50% industrial. The managers can borrow to enhance returns: it can borrow up to 40% of the total assets at the time of application.

If you’re interested in this property trust, you need to be willing to leave your money in over the long-term. It’s not suitable for anyone who plans to withdraw within five years.

BMO rates the trust as 4, which is medium risk.

Ongoing costs include:

• 0.13% portfolio transaction costs
• 2.86% other ongoing costs

TR Property Investment Trust

The final trust is the TR Property Investment Trust, which is incorporated in England and listed on the LSE. Unlike other property trusts, the TR Property Investment Trust invests both in UK investment property and property companies and property-related businesses.

The investment mix is: UK equities 25-50%, Continental European equities 45-75%, UK direct property 5-20%, other equities 0-5%, listed bonds 0-5%, unlisted equities and bonds 0-5%.

BMO assigned this trust a risk factor of 4, which is a medium risk class.

The costs associated with the trust include:

• 0.04% portfolio transaction costs
• 0.92% other ongoing costs

You’ll also pay performance fees of 0.57%. These costs are incidental and tied to a hurdle rate.

Opening an Account with BMO Investments

To open a BMO Investment account, you need to be a UK resident. You will need to prove your nationality and tax residency.

You’ll also need your National Insurance number as well as a debit card to fund the account.

All in, it should take you less than 10 minutes to complete the initial sign up page. If you have any issues, you can phone BMO or run through BMO’s extensive support pages. If you prefer, you can also print the application form and send it in via the post.

Your minimum balance is £500, which means you’ll need a lump sum of a minimum of £500 to get started. There is also a minimum commitment to £50 per month. The £50 minimum does not apply solely to your overall account: it applies per investment trust.

BMO allows you to open an ISA if you are a UK resident. However, you cannot open an ISA if you live in or move to the United States.

Transferring Your Investments to BMO

Do you already have an investment portfolio and hope to make a switch?

To transfer your ISA to BMO, you complete the transfer initiation form and return it to BMO. Once received, BMO says it can take four to six weeks.

When transferring money, you must transfer the whole amount you saved in the current year. You can leave some of all of the previous year’s investments behind if you wish. If you don’t send over the whole amount you’ve already invested this year, you won’t enjoy the rest of your tax-free allowance (if available).

ISA Review

BMO’s ISA offers relative flexibility considering its product offering is limited to fully-managed trusts.

The option to switch trusts and invest in multiple trusts at a time and enjoy active management from the investment team is a benefit.

The flexibility offered does come at a cost that new or infrequent savers and investors should be wary of.

First, you’ll need to invest a minimum of £50 per month per trust open. So, if you have three trusts, you must allow for a direct debit of £150 per month. Your minimum top-up per trust is also £250.

Second, the fees are a bit expensive compared to other players on the market. You’ll pay both £60+ VAT in annual fees (or £72) as well as the 0.2% charge on investments bought. You’ll also have the ongoing trust charges. Ultimately, you’ll benefit from this ISA more if you intend to buy and hold your investments than you would if you intend to withdraw or switch between funds.

Additionally, one of the important things you should know about BMO before signing up is that you may or may not be able to enjoy full use of the online portal. At a minimum, you can update your details, view account transactions, and see the value of your account.

BMO notes that not everyone with an account can make a lump sum top-up, make a full or partial withdrawal, or switch funds online. BMO says these features are only available to you if your BMO account is solely in your name. If you have a joint account, you need to get in touch with BMO to make any changes.

All in all, the BMO ISA is a helpful product for confident investors who aren’t particularly choosy about where their money goes within a trust but who want the confidence of working with a company with a long successful history in investment management. The fees are on par for active management, but you may still want to seek financial advice from an advisor before selecting your portfolio, particularly given the long-term view most products tend to take.

Customer Service

BMO Global doesn’t have a Trustpilot rating to gauge its customer service. You should be wary of the page that does exist: it caters to a U.S. bank with the same name. BMO GAM also doesn’t have much of a social media presence.

However, the core elements of customer service do exist at BMO. There are multiple ways to get get in touch, and the website provides you with most account information.

According to BMO itself, 98% of customers are either “satisfied” or “very satisfied” with the customer service offered by BMO.

Who is BMO Suitable for?

BMO is suitable for confident investors with an interest in diversifying their funds and who want fund management from a deft hand. BMO’s ISA product is a helpful place to park funds, but the fees are prohibitive for larger accounts. It is also ideal for those investors who have an interest and strategy that aligns with investment in commercial property and property-related companies.

The combination of the use of investment trusts with the minimum balance means BMO is less ideal for novice investors or those who can’t commit to regular monthly savings. You won’t grow your investment knowledge using BMO.

BMO isn’t for active traders looking for a complicated trading platform. BMO doesn’t offer any form of online trading, even in the General Investment account.

BMO Investments FAQs