BMO Alternative Strategies Fund

Data updated: 2020-07-20

C000145196 — BMO Alternative Strategies Fund. Emerging Markets Blend / Core Equity · $18.19M AUM. Holdings, fees, performance and SEC filings.

C000145196 Fund Overview

BMO Alternative Strategies Fund is a US mutual fund managed by Bmo Funds, Inc., categorised as Emerging Markets Blend / Core Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

Type: US mutual fund
Manager: Bmo Funds, Inc.
Category: Emerging Markets Blend / Core Equity
Assets under management: $18.19M
SEC CIK: 0000889366
SEC series ID: S000046501
Share class ID: C000145196

C000145196 Investment Objective and Strategy

BMO Alternative Strategies Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Bmo Funds, Inc..

Investment objective

The Fund seeks capital appreciation with an emphasis on absolute returns.

Principal investment strategy

The Adviser seeks to provide attractive risk-adjusted returns over the long term, broad investment diversification, and to maintain lower volatility relative to the broad equity and fixed income markets by allocating the Funds assets across a variety of investment strategies, generally by employing multiple sub-advisers (each, a Sub-Adviser). In allocating the Funds assets among multiple Sub-Advisers, the Adviser seeks to diversify exposures across geographies, sectors, market capitalizations, and security types. A range of qualitative and quantitative factors is reviewed when determining the allocations to the Sub-Advisers, including each Sub-Advisers investment style, historical performance, and portfolio holdings. The Adviser is responsible for setting and monitoring the Funds investment guidelines, selecting the Funds Sub-Advisers, managing the Funds cash, allocating Fund assets among Sub-Advisers, and monitoring the performance of each Sub-Adviser.

The Adviser also may manage a portion of the Funds assets to (i) properly position the overall portfolio from a risk management perspective; (ii) manage one or more of the strategies discussed below on a temporary or long-term basis; or (iii) make additional investments at its own discretion. The Adviser currently manages a portion of the Funds assets by implementing a Long/Short Equity Strategy, as described more fully below. CTC myCFO, LLC (CTC), one of the Funds Sub-Advisers and an affiliate of the Adviser, assists the Adviser in identifying and selecting the Sub-Advisers and determining the most appropriate allocation of the Funds assets among the Sub-Advisers. The identity and number of Sub-Advisers and the allocation of Fund assets among them will change over time. Each Sub-Adviser other than CTC is responsible for the day-to-day investment decisions for the portion of Fund assets allocated to it, although the Adviser may, in its sole discretion, develop performance benchmarks and investment guidelines with the Sub-Advisers.

In recommending new Sub-Advisers to the Funds Board of Directors, the Adviser conducts a detailed quantitative, qualitative, and risk analysis process and considers numerous factors, including, but not limited to, the Sub-Advisers investment style, reputation, depth and experience of its investment team, financial stability, demonstrated ability to implement a particular investment strategy, consistency of past returns, and policies and procedures to monitor account for risk. The investment strategies that the Sub-Advisers may utilize generally include the following types of investments: (i) equity securities of companies of any market capitalization throughout the world (including the United States), which may include common and preferred stocks, convertible securities, rights and warrants to purchase common stock, depositary receipts, and securities issued by other investment companies, including exchange traded funds (ETFs); (ii) debt securities, which may include debt securities of governments throughout the world (including the United States) as well as their agencies and/or instrumentalities, debt securities of corporations throughout the world (including the United States), below investment grade debt securities, including defaulted securities and distressed debt (commonly known as junk bonds), bank loans, and convertible bonds; and (iii) foreign currencies.

The Sub-Advisers invest without limitation in securities of any duration. In addition, certain Sub-Advisers may engage in long and short sales transactions to employ their strategies. When a Sub-Adviser sells securities short for the Fund, it sells a security that the Fund does not own (but has borrowed) at its current market price in anticipation that the price of the security will decline. To complete the short sale transaction, the Sub-Adviser buys the same security for the Fund in the market at a later date and returns it to the lender. Long positions benefit from an increase in the price of the underlying instrument or asset class, while short positions benefit from a decrease in that price. The Sub-Advisers may invest in a variety of derivative instruments for hedging or investment purposes.

Such derivative instruments may include: (i) futures contracts based on securities, indices, currencies, and/or U.S. government bonds; (ii) forward foreign currency exchange contracts; (iii) swaps, such as credit default swaps, total return swaps, and/or interest rate swaps; and (iv) call and put options on securities and indices, including writing (selling) calls against positions in the portfolio (covered calls) or writing (selling) puts on securities and indices. The Sub-Advisers may use any of these derivatives in an effort to enhance returns or manage and/or adjust the risk profile of the Fund or the risk of individual positions. A Sub-Adviser may choose not to hedge its positions. As a result of the Funds derivatives usage, the Fund may have economic leverage, which means that the sum of the Funds investment exposures through the use of its derivatives may exceed the amount of assets invested in the Fund, although these exposures may vary over time.

In addition to the specific Sub-Adviser Strategies described below, the Adviser may selectively implement an overlay strategy from time to time to manage the risk of the combined portfolio. The Adviser monitors the portion of assets allocated to each Sub-Adviser. The Adviser also reviews the risk profile of the overall portfolio and the Funds adherence to investment guidelines. The Adviser may implement the overlay strategy when the Adviser considers the overall portfolio to have more exposure to a certain type of risk than is appropriate, when the Adviser considers the Funds volatility to be higher or lower than desired, or to ensure adherence to investment guidelines. On occasion, the Adviser also may utilize the overlay strategy to seek additional returns. In implementing the overlay strategy, the Adviser expects to utilize derivative instruments, such as S&P 500 futures contracts, and may utilize other types of investments at times.

The Adviser expects the overlay strategy will allow it to manage the Funds risks with more precision with the intent to deliver more consistent returns with lower volatility. Sub-Adviser Strategies. The Adviser expects that the Sub-Advisers (and, at times, the Adviser) generally will implement one or more of the investment strategies summarized below. These strategies are similar to investment strategies traditionally employed by hedge funds, which include non-traditional or alternative strategies. These strategies may be used by a Sub-Adviser or Adviser to seek high total return, to provide hedging benefits, to manage volatility, and/or to provide market-neutral returns for the Fund. From time to time, the Fund may have little or no assets allocated to any one particular strategy in light of economic or other conditions (including the availability of Sub-Advisers), as determined by the Adviser in its sole discretion.

The descriptions of the following investment strategies are subjective, are not complete descriptions of any strategy, and may differ from classifications made by other investment firms that implement similar investment strategies. Long/Short Equity Strategies: The Adviser or a Sub-Adviser (for purposes of this section only, each is referred to as an Adviser) employing a long/short equity strategy generally seeks to produce returns from investments in the equity markets by combining long and short positions in particular securities or markets. For example, in employing this strategy, an Adviser may use fundamental research to identify securities to buy long (with the expectation that they will increase in value) and sell short (with the expectation that they will decrease in value). Other methodologies, such as relative value or event driven, also may be utilized to determine which securities to buy long and which to sell short.

Under this strategy, the Fund may purchase securities or sell securities short or use options and futures or other derivative instruments on securities, ETFs, or indices to gain long or short exposure to securities or markets. An Adviser employing this strategy for the Fund may invest in one or more countries, including developed and emerging market countries, and may specialize in specific sectors, industries, or market capitalizations. Hedged Credit Strategies: A hedged credit (or long/short fixed income) strategy generally involves taking both long and short positions in fixed income securities across multiple sectors and credit quality ranges in one or more countries, including developed and emerging market countries. An Adviser that employs this strategy generally uses a fundamental driven approach to investing across the capital structure of a company and attempts to profit from investing in all aspects of a companys capital structure through both long and short positions.

Other methodologies, such as event driven also may be utilized to determine the long and short positions. In employing a hedged credit strategy, an Adviser may invest in a variety of fixed or variable rate debt instruments and other securities of all credit qualities including high yield bonds, distressed securities, and companies near, or in, bankruptcy. An Adviser also may invest in equity securities and other types of securities when employing this type of strategy. These securities may be currently out-of-favor, have low credit ratings, or be affected by other adverse factors which may be due to an anticipation of an upgrade in the debt instruments ratings, expectation that a reorganization will provide greater value, or other business factors that an Adviser believes the marketplace has not yet reflected.

Under this strategy, the Fund may purchase securities or sell securities short and use collateralized debt obligations and derivative instruments, such as credit default swaps and equity options, to gain long or short exposure to securities or markets. Event Driven Strategies: An event driven strategy seeks to profit from pricing inefficiencies that may result from specific, catalyst-driven events, such as mergers, spin-offs, corporate restructurings, and management changes. Investments pursuant to this strategy focus on company-specific activities and seek to profit from specific events regardless of market direction. An Adviser employing this strategy for the Fund may invest in either equity or debt securities, may invest in one or more countries, including developed and emerging market countries, and may specialize in specific sectors, industries, or market capitalizations.

Relative Value Strategies: A relative value strategy employs investment techniques that are intended to profit from pricing inefficiencies, which involves taking a position in one financial instrument while offsetting the position with another financial instrument in an attempt to benefit from changes in price. For example, an Adviser utilizing this strategy may use fundamental monitoring of securities with macro data analysis to determine the most attractive company-specific securities for both long and short positions. In addition, an Adviser may seek to identify pricing inefficiencies in volatile products, such as options, and buy or sell a combination of such products to profit from their mispricing. Under this strategy, an Adviser may purchase securities or sell securities short, including ETFs, and use derivative instruments, including over-the-counter and exchange traded instruments, such as futures, swaps, currency forwards, and options on securities, ETFs, or indices to realize pricing inefficiencies or to hedge the portfolio.

An Adviser employing this strategy for the Fund may invest in one or more countries, including developed and emerging market countries, and may specialize in specific sectors, industries, or market capitalizations.

C000145196 Costs and Fees

C000145196 costs about $170 per $10,000 invested per year in fund expenses.

Net expense ratio: 1.70%
Gross expense ratio: 2.29%
Portfolio turnover: 64%
Brokerage commissions: 15.21 bps of average net assets (SEC N-CEN)

C000145196 Cashflows

Over the 12 months to 2020-05, BMO Alternative Strategies Fund had net outflows of $15.99M, from monthly SEC N-PORT filings.

Month	Net flow
2020-05	−$295.99K
2020-04	−$14.16M
2020-03	−$2.27M
2020-02	−$248.04K
2020-01	$602.87K
2019-12	$556.59K

C000145196 Debt Constituents

No individual debt constituents are reported in BMO Alternative Strategies Fund's latest SEC N-PORT filing.

C000145196 Prospectus and SEC Filings

Official BMO Alternative Strategies Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

Related Funds

Other Emerging Markets Blend / Core Equity funds tracked on ABC INVEST:

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.