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Daniel Fry
Chris Fry
Bryndon Fry
Connie Taccone

Toll Free: 844-266-8490

419 King Street West
Suite 301
Oshawa, ON
L1J 2K5

The Guided Portfolios

The Guided Portfolio process is a simple process designed to provide a disciplined approach to managing your equity portfolio. By following the process’ guidelines, your portfolio will always be well diversified and structured to fit the current BMO Capital Markets economic outlook. Furthermore, you will always own a well diversified portfolio of well rated stocks with attractive fundamental prospects. The diversification enhances your portfolio’s ability to deliver attractive returns long-term while reducing risk at the same time.

The Process
  • Three Portfolios — Canadian Equities, U.S. Equities, and North American Equities.
  • The portfolios will be constructed and managed using a well-defined process that marries a top-down strategy — to determine Asset Mix and Sector Allocation — with bottom-up stock selection — to select the stocks for the portfolios.
  • The BMO Nesbitt Burns Investment Strategy Committee will meet quarterly to formulate a view of key macroeconomic variables, such as interest rates, economic growth, inflation expectations, earnings growth and equity market valuations.
  • Complete quarterly updates and reports published every December 1, March 1, June 1 and September 1.

Portfolio Construction and Structure
  • A combination of technical, quantitative and fundamental research will be used to select the companies for the portfolios. However, the bias will be towards fundamental research.
  • The portfolios will consist of approximately 20 equal weighted positions in well rated stocks that have attractive fundamental prospects and rate well within their respective peer groups. Sector allocation will be achieved through the number of stocks allocated to each sector.
  • The portfolios will be monitored daily, with a full overview and update every quarter.

Stock Selection Process

Buy Criteria
In order for companies to be considered for inclusion, there must be fundamental research coverage by either BMO Capital Markets, JPMorgan, S&P or ISI Group, and be rated Market Perform or better. In addition, the trade-ability/liquidity of the stock will be considered when evaluating the company.

Sell Discipline
One of the more challenging aspects of managing a portfolio is knowing what to sell and when to sell it. Too often, the decision is unreasonably affected by emotions, tax situations, etc. By following the Guided Portfolio process, the decision is largely made for you, enabling you to more effectively manage your portfolio.

Three situations:
1) Quarterly Update: The Committee will review the entire portfolio every quarter, and will make decisions based on the recommended sector allocation and current outlook for the respective companies.
2) Rating Downgrade: A rating downgrade will warrant a full review of the position with a recommendation as to hold or sell.
3) Rebalance Large Positions: While new portfolios are typically equally weighted across twenty positions, over time as market prices fluctuate, the positions will vary in terms of their percentage weighting in your equity portfolio. Positions may need to be rebalanced if their weightings approach 10%. This rebalancing process ensures your portfolio is not overexposed to any one company, which will work to minimize risk.


Canadian Portfolio
The Guided Portfolio Committee will meet quarterly, and more frequently if necessary, to
select the stocks for the portfolio. The Committee will use BMO Capital Markets Research as the primary source of research when populating the Canadian portfolio. BMO Capital Markets has been rated #1 Overall Research Team in the Brendan Woods Canadian Institutional Performance Report for the past 27 years. This prestigious recognition speaks to the strength of the BMO Capital Markets Research Team and product.

Returns will be tracked and published every quarter. The turnover will be reasonable, with approximately 15 to 20 trades annually. There will be alternative choices to the primary portfolio, which will help minimize turnover.


U.S. Portfolio
  • The U.S. Portfolio will also have approximately 20 equal weighted positions, with sector recommendations reflected within the portfolio.
  • Will be structured similarly to the Canadian portfolio, and will be managed by BMO Nesbitt Burns U.S. Equities Specialists.
  • The investment decisions will be based primarily on research from JPMorgan, ISI Group, S&P, and BMO Capital Markets.
  • Other sources may also be used.
  • The S&P 500 is the benchmark for the U.S. Guided Portfolio.

North American Portfolio
  • The North American Portfolio will be a diversified global equity portfolio with the Canadian investor in mind.
  • It will also have approximately 20 equal weighted positions.
  • The Companies will be sourced primarily from the Canadian Guided Portfolio and the
    U.S. Guided Portfolio
  • The portfolio will take advantage of the strengths of each market – Canada, U.S., and International.
  • The global equity market allocation will be similar to that being recommended by the
    Investment Strategy Committee.

Benefits of the Guided Portfolios
  • A simple process to follow that ensures you always have a well diversified portfolio.
  • The portfolio will be comprised of well rated stocks.
  • The sector allocation will reflect the committee’s assessment of which sectors offer the best potential and which offer the worst.
  • The portfolio will have overall turnover that is reasonable and easily managed.
  • A sell discipline.
  • The portfolios will be constantly monitored.
  • Superior returns.