BMO Global Strategic Bond Fund (the “Fund”) For the period ended September 30, 2013 • Manager: BMO Investments Inc. (the “Manager”) Portfolio manager: PIMCO Canada Corp., Toronto, Ontario (the “portfolio manager”)

2013 Annual Management Report of Fund Performance

This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the Fund. If the annual financial statements of the Fund do not accompany the mailing of this report, you may obtain a copy of the annual financial statements at your request, and at no cost, by calling 1-800-665-7700, by writing to us at BMO Investments Inc., First Canadian Place, 100 King Street West, 43rd Floor, Toronto, Ontario, M5X 1A1 or by visiting our website at www.bmo.com/mutualfunds or SEDAR at www.sedar.com. You may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record and/or quarterly portfolio disclosure.

MANAGEMENT DISCUSSION OF FUND PERFORMANCE

Investment Objective and Strategies show signs of recovery despite the fiscal drag. Risk markets The Fund’s objective is to provide a fixed monthly distribution rallied, as equity prices reached their all-time highs by the and capital appreciation potential by investing primarily in end of September. Market sentiment turned positive on debt instruments issued by governments and corporations encouraging signs out of the housing and labour markets. In from around the world. spite of this, it was still unclear if the effects of sequestration (i.e., a process that automatically cuts the federal budget The portfolio manager invests in a diversified pool of fixed- across most departments and agencies) would linger for income securities, which primarily includes high yield longer than expected. At its September meeting, the U.S. securities with a credit rating below BBB and emerging Federal Reserve Board (the “Fed”) announced that it would markets debt. Security selection is driven by the fundamental make no changes to its asset purchase program (i.e., a analysis of credit ratings as well as using quantitative and US$85 billion monthly bond buying program). The Fed’s other research methods. choice to steer clear of market consensus and delay tapering Risk (i.e., monetary stimulus reduction) left investors in a state No changes affecting the overall level of risk associated with of disbelief. A few key factors guided its hand, chief among investing in the Fund were made during the period. The them, U.S. employment and inflation data. risks of this Fund remain as discussed in the Fund’s most In Japan, the window of political stability removed recent simplified prospectus or its amendments. impediments for its Prime Minister to implement his “third Results of Operations arrow” of structural reform, which, together with aggressive Over the 12-month period ended September 30, 2013, (the fiscal and monetary stimulus, form a grand policy experiment “period”), Series A units of the Fund returned -0.73%. meant to stimulate growth and boost inflation. Although Please see Past Performance for information on the Japan will likely meet its two percent growth target this year, performance returns of the Fund’s other series. whether the government will be successful in generating robust, self-sustainable growth, remains to be seen. The list During the period, three themes dominated the markets. of challenges is long: an ageing population, rigid labour Fiscal and monetary policy creating uncertainties in the markets, and an exceptionally high level of public debt to U.S.; an unrelenting demand on developed markets’ central name a few. Addressing them will require a bold policy to keep policy interest rates low; and, the Japanese agenda that fundamentally alters the way certain segments governments aggressive stimulus designed to boost of the economy operate. Any delay on reforms may lead employment and growth. investors to question whether the country’s government is The U.S. economic data over the period was generally capable of overcoming these challenges. positive, with unemployment levels starting to improve, reaching 7.3%. Gross domestic product growth continued to BMO Global Strategic Bond Fund

At the beginning of the period, with many developed The portfolio manager believes that the U.S. economy is economies in the doldrums, emerging markets (“EM”) were unlikely to escape both a government shutdown and another favored destinations for capital in search of yield. However, debt ceiling debate unscathed. In addition, the U.S. treasury’s after the hint of tapering by the Fed, EM bonds were shaken borrowing authority is set to expire in mid October 2013, in recent months by continued capital outflows as external which means the U.S. may soon find itself subjected to investors reevaluated growth prospects. Unlike the EMs of another destabilizing debate over the debt ceiling. decades past, many have ample reserves to defend their In spite of persistent structural impediments to robust currencies and some are doing a better job at positioning economic growth, the portfolio manager sees a number of themselves to weather the storm. The central of Brazil, reasons to be cautiously optimistic for future prospects over for example, hiked its benchmark rate an additional the next twelve months. Firstly, fiscal policy (in the U.S. and 50 basis points in recent months in order to dampen Europe) is likely to be less of a drag on global growth in the inflationary pressures. year ahead than the year just passed, although the portfolio During the period, the main contributors to the Funds manager expects U.S. sequestration to affect growth over performance was an underweight to EM spread (i.e., the next few months. Secondly, measures of global financial difference in yields) duration (i.e., the average time it takes wealth have recently increased substantially, which should for an investor to receive the face value and cumulative strengthen private sector confidence in the year ahead. coupon payments of a bond investment measured in years), Finally, global central banks will likely continue to use as EM spreads widened. An allocation to non-agency monetary policy to reduce negative risks associated with the mortgages, appreciated amid increased demand for risk Financials sector risks, as the European Central Bank rose assets. Underweight to vulnerable EM countries, such as to the occasion during the sovereign debt crisis of 2012, and Ukraine, as well as an overweight to high quality countries, high quality EM central banks were doing so more recently such as , helped relative performance. during the EM liquidity crisis in the 2nd quarter, 2013.

The main detractors to the Fund’s relative performance Future Accounting Standards during the period was an underweight to the High Yield Canadian investment entities will be required to prepare sector, which, reduced performance as spreads compressed. their financial statements in accordance with International Tactical exposure to the intermediate and long end of the Financial Reporting Standards (“IFRS”), as issued by the Brazilian, Indonesian, South African and Mexican local International Accounting Standards Board, for fiscal years yield curves, detracted from performance. Within EM beginning on or after January 1, 2014. As a result, the Fund corporates, security selection was negative. will report its financial results for the interim period ending March 31, 2015, prepared on an IFRS basis. It will also The Fund distributes a fixed amount per unit each month, provide comparative data on an IFRS basis, including an consistent with the Fund’s stated objective of providing a opening balance sheet as at October 1, 2013 (transition stable cash flow to its unitholders. A portion of a distribution date). A summary of the significant standards impacting the may consist of a return of capital, this portion may be Fund under IFRS are outlined below. significant, and will occur when the income earned by the Fund per unit is less than the fixed amount of the distribution. The differences between the Fund’s accounting policies Distributions are expected to continue to include return of under Canadian generally accepted accounting principles capital until there is a general improvement in the economy, (GAAP) and IFRS requirements will result in measurement an increase in interest rates, or there is a change in the fixed and recognition differences on transition to IFRS. The net amount to be distributed. impact of these differences will be recorded in the increase/ For information on the Fund’s performance and composition, decrease in net assets attributable to redeemable unitholders. please refer to the Past Performance section and Summary of The framework for fair valuation is set out under IFRS 13 Investment Portfolio section of this report. Fair Value Measurement, which includes the requirements Recent Developments for the measurement and disclosure of fair value. If an asset The portfolio manager expects the global economy to grow or liability measured at fair value has a bid price and an ask at a real rate of 2.25% to 2.75% over the next twelve months. price, the standard requires valuation to be based on a price While this marks acceleration relative to prior forecasts, the within the bid-ask spread that is most representative of fair portfolio manager’s expectations remain below market value. The standard allows the use of mid-market pricing or consensus, as growth remains constrained by new normal other pricing conventions that are used by market participants dynamics. BMO Global Strategic Bond Fund as a practical means for fair value measurements within a RELATED PARTY TRANSACTIONS bid-ask spread. Thus this standard will impact the net BMO Investments Inc. (“BMOII”), an indirect, wholly-owned assets per unit for financial statement reporting purposes subsidiary of , is the Manager of the Fund. compared to current standards, and may also result in the From time to time, the Manager may, on behalf of the Fund, elimination of the differences between the net asset per unit enter into transactions or arrangements with or involving and net asset value per unit (“NAVPU”) at the financial other members of BMO Financial Group, or certain other statement reporting date. While IFRS does not require persons or companies that are related or connected to the interest income to be disclosed for debt instruments Manager (each a “Related Party”). The purpose of this section measured at fair value through profit or loss, when interest is to provide a brief description of any transaction involving income is disclosed, IFRS requires that the effective interest the Fund and a Related Party. rate method of calculating accrued interest be used rather than the straight-line amortization method. The Manager is Administration Fees assessing the impact of this change to the Fund’s financial The Fund pays a fixed administration fee to the Manager. statements. The Manager has not identified any changes The Manager in return pays the operating expenses of the that will impact NAVPU as a result of the transition to IFRS. Fund, other than certain specified expenses that are paid directly by the Fund (“Fund Expenses”). Fund Expenses Where the Fund holds controlling interest in an investment, include interest or other borrowing expenses, costs and it is the Manager’s expectation that the Fund will qualify as expenses related to the operation of the Fund’s Independent an investment entity in accordance with IFRS 10 Consolidated Review Committee (“IRC”), including fees and expenses of Financial Statements. As such, the Fund will not be required IRC members, taxes to which the Fund is or might be subject, to consolidate its investments, but rather to hold the and costs associated with compliance with any new investments at fair value through profit or loss regardless of governmental or regulatory requirement introduced after whether those investments are controlled. If the Fund fair December 1, 2007 (e.g., cost associated with the production of values the investments it controls, it may be required to make Fund Facts, filed in compliance with the relevant amendments additional financial statement disclosures on its controlled to NI 81-101). Fund Expenses are allocated proportionately investments in accordance with IFRS 12 Disclosure of among the series. If the Fund Expenses are specific to a Interests in Other Entities (“IFRS 12”). IFRS 12 also requires series, the Fund Expenses are allocated to that series. The additional disclosures if the Fund is determined to qualify fixed administration fee is calculated as a fixed annual as an investment entity without having all of the typical percentage of the average net asset value of each relevant characteristics of an investment entity. series of the Fund. Further details about the fixed The criteria contained within IAS 32 Financial Instruments: administration fee and/or Fund Expenses can be found in Presentation (“IAS 32”) will result in the classification of the Fund’s most recent simplified prospectus at the unitholders’ equity as a liability within the Fund’s www.bmo.com/mutualfunds or www.sedar.com. Statement of Net Assets, unless all conditions required for Distribution Services equity classification are met. The Manager is currently The Manager markets and distributes the Fund directly assessing the Fund’s unitholder structure to determine through Bank of Montreal branches and through registered classification under IAS 32. dealers and brokers, including BMO InvestorLine Inc. and Under IFRS, cash flows statement is one of the primary BMO Nesbitt Burns Inc., both affiliates of the Manager. The financial statements required to be presented. The Fund Manager pays to these affiliates annual service or trailing will therefore be presenting cash flows statement in its set commissions based on the average daily value of the units of financial statements in accordance with the presentation that are held in investor accounts. requirements in IAS 7 Statement of Cash Flows. BMO Global Strategic Bond Fund

Management Fees Series I Periods ended Sep. 30 The Manager is responsible for the day-to-day management 2013 2012 2011 2010 2009 of the business and operations of the Fund. The Manager Net assets, beginning of period $ 10.11 8.95 9.64 8.72 8.91 monitors and evaluates the Fund’s performance, pays for the Increase (decrease) investment advice provided by the Fund’s portfolio manager from operations: Total revenue $ 0.60 0.58 0.62 0.70 0.53 and provides certain administrative services required by the Total expenses $ — — — — — Fund. As compensation for its services the Manager is entitled Realized gains (losses) to receive a management fee payable monthly, calculated for the period $ -0.23 0.59 -0.30 0.39 -0.44 based on the daily net asset value of each series of the Fund Unrealized gains (losses) for the period $ -0.08 0.39 -0.41 0.44 0.61 at the maximum annual rate set out in the table below. Total increase (decrease) from operations (2) $ 0.29 1.56 -0.09 1.53 0.70 As a Percentage Distributions: of Management Fees From income General (excluding dividends) $ 0.79 0.40 0.67 0.46 0.82 Maximum Annual Administration, From dividends $ — — — — — Management Dealer Investment From capital gains $ 0.14 — 0.06 — — Fee Rate* Compensation Advice and Profit Return of capital $ 0.00 0.02 — — — % % % (3) Total Annual Distributions $ 0.93 0.42 0.73 0.46 0.82 Series A Units 1.75 3 97 Net assets, end of period $ 9.35 10.11 8.95 9.64 8.72 Series I Units — — — Series F Units 1.25 0 100 Series F Advisor Series Units 1.75 44 56 Periods ended Sep. 30 2013 2012 2011 2010 2009(4)

* For Series I Units, separate Series I fees are negotiated and paid by each Series I investor. Because the Net assets, beginning of period $ 13.80 12.29 13.36 12.11 10.00*) Manager pays no distribution, service or trailing fees on Series I Units, Series I Units will have lower Series Increase (decrease) I fees than the management fees for Series A Units. from operations: Total revenue $ 0.82 0.80 0.85 0.96 0.64 Total expenses $ -0.22 -0.22 -0.22 -0.20 -0.17 FINANCIAL HIGHLIGHTS Realized gains (losses) The following tables show selected key financial information for the period $ -0.22 0.87 -0.27 0.60 2.24 Unrealized gains (losses) about the Fund and are intended to help you understand the for the period $ -0.48 0.48 -0.62 0.37 0.22 Fund’s financial performance for the periods indicated. Total increase (decrease) from operations (2) $ -0.10 1.93 -0.26 1.73 2.93 The Fund’s Net Assets per Unit (1) Distributions: From income Series A (excluding dividends) $ 0.83 0.38 0.84 0.47 0.54 Periods ended Sep. 30 From dividends $ — — — — — 2013 2012 2011 2010 2009 From capital gains $ 0.17 — 0.06 — — Net assets, beginning of period $ 7.91 7.25 7.98 7.40 8.54 Return of capital $ 0.01 0.04 — — — Increase (decrease) Total Annual Distributions (3) $ 1.01 0.42 0.90 0.47 0.54 from operations: Net assets, end of period $ 12.80 13.80 12.29 13.36 12.11 Total revenue $ 0.47 0.46 0.51 0.58 0.45 Total expenses $ -0.17 -0.17 -0.17 -0.16 -0.15 Realized gains (losses) for the period $ -0.15 0.47 -0.04 0.33 0.53 Unrealized gains (losses) for the period $ -0.19 0.33 -0.42 0.24 0.92 Total increase (decrease) from operations (2) $ -0.04 1.09 -0.12 0.99 1.75 Distributions: From income (excluding dividends) $ 0.49 0.35 0.51 0.29 1.40 From dividends $ — — — — — From capital gains $ 0.13 — 0.06 — — Return of capital $ 0.00 0.07 0.02 0.13 0.01 Total Annual Distributions (3) $ 0.62 0.42 0.59 0.42 1.41 Net assets, end of period $ 7.26 7.91 7.25 7.98 7.40 BMO Global Strategic Bond Fund

Advisor Series Series I Periods ended Sep. 30 Periods ended Sep. 30 2013 2012 2011 2010 2009(4) 2013 2012 2011 2010 2009

(1) Net assets, beginning of period $ 13.66 12.23 13.23 12.02 10.00*) Total net asset value (000’s) $ 175,159 542,720 413,086 208,880 52,270 Increase (decrease) Number of units from operations: outstanding (000’s) (1) 18,736 53,676 46,141 21,670 5,995 Total revenue $ 0.81 0.79 0.85 0.96 0.65 Management expense ratio + % — — — — — Total expenses $ -0.29 -0.29 -0.29 -0.27 -0.22 Management expense ratio Realized gains (losses) before waivers or absorptions + % 0.00 0.00 — — — for the period $ -0.21 0.88 -0.26 0.61 2.15 Trading expense ratio (3) % — — — — — Unrealized gains (losses) Portfolio turnover rate (4) % 57.75 47.36 53.99 83.45 157.47 for the period $ -0.50 0.48 -0.62 0.45 0.17 Net asset value per unit $ 9.35 10.11 8.95 9.64 8.72 Total increase (decrease) from operations (2) $ -0.19 1.86 -0.32 1.75 2.75 Series F Distributions: Periods ended Sep. 30 2013 2012 2011 2010 2009(5) From income (excluding dividends) $ 0.75 0.37 0.71 0.43 0.58 Total net asset value (000’s) (1) $ 42,553 43,366 33,585 22,698 17,167 From dividends $ — — — — — Number of units From capital gains $ 0.17 — 0.06 — — outstanding (000’s) (1) 3,323 3,141 2,734 1,699 1,418 Return of capital $ 0.01 0.05 — — — Management expense ratio (2) % 1.65 1.69 1.71 1.63 1.60 Total Annual Distributions (3) $ 0.93 0.42 0.77 0.43 0.58 Management expense ratio Net assets, end of period $ 12.67 13.66 12.23 13.23 12.02 before waivers or absorptions % 1.70 1.69 1.71 1.63 1.60 Trading expense ratio (3) % — — — — — * Initial net assets. Portfolio turnover rate (4) % 57.75 47.36 53.99 83.45 157.47 (1) This information is derived from the Fund’s audited financial statements. The net assets per unit presented Net asset value per unit $ 12.80 13.80 12.29 13.36 12.11 in the financial statements differs from the net asset value calculated for fund pricing purposes. An explanation of these differences can be found in the notes to the Fund’s financial statements. (2) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The Advisor Series Periods ended Sep. 30 increase/decrease from operations is based on the weighted average number of units outstanding over the (5) financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. 2013 2012 2011 2010 2009 (3) Distributions were either paid in cash or reinvested in additional units of the Fund, or both. Total net asset value (000’s) (1) $ 168,364 151,475 107,241 74,830 37,091 (4) The information shown in this column is for the period beginning November 3, 2008 (the series’ launch date) Number of units and ending September 30, 2009. outstanding (000’s) (1) 13,291 11,086 8,771 5,656 3,085 Management expense ratio (2) % 2.22 2.21 2.22 2.15 2.12 Ratios and Supplemental Data Management expense ratio before waivers or absorptions % 2.24 2.21 2.23 2.17 2.12 Series A (3) Periods ended Sep. 30 Trading expense ratio % — — — — — 2013 2012 2011 2010 2009 Portfolio turnover rate (4) % 57.75 47.36 53.99 83.45 157.47 Net asset value per unit $ 12.67 13.66 12.23 13.23 12.02 Total net asset value (000’s) (1) $ 139,575 156,858 161,467 193,541 181,619 Number of units + Operating expenses are paid by BMOII and management fees are paid directly to BMOII as negotiated outstanding (000’s) (1) 19,233 19,820 22,283 24,267 24,547 with the investor. Management expense ratio (2) % 2.23 2.23 2.23 2.15 2.11 (1) This information is provided as at September 30 of the period shown, as applicable. Management expense ratio (2) Management expense ratio is based on total expenses (excluding commissions and other portfolio before waivers or absorptions % 2.25 2.23 2.23 2.16 2.11 transactions costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period. Trading expense ratio (3) % — — — — — (3) (4) The trading expense ratio represents total commissions and other portfolio transaction costs expressed Portfolio turnover rate % 57.75 47.36 53.99 83.45 157.47 as an annualized percentage of daily average net asset value during the period. For all financial periods Net asset value per unit $ 7.26 7.91 7.25 7.98 7.40 listed, no commissions or other portfolio transaction costs were incurred by the Fund. As a result, the trading expense ratio for all the periods was zero. (4) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio manager manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher a fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. (5) The information shown in this column is for the period beginning November 3, 2008 (the series’ launch date) and ending September 30, 2009. BMO Global Strategic Bond Fund

PAST PERFORMANCE Year-by-Year Returns The Fund’s performance information assumes that all The following bar charts show the performance for each distributions made by the Fund in the periods shown were series of the Fund for each of the financial years shown. The used to purchase additional units or shares of the Fund and charts show in percentage terms how an investment made is based on the net asset value of the Fund. on the first day of each financial year would have increased or decreased by the last day of each financial year. The performance information does not take into account Series A sales, redemption, distribution or other optional charges that, if applicable, would have reduced returns or performance. 30%

Please remember that how the Fund has performed in the 13.93 15.39 past does not indicate how it will perform in the future. 15% 4.90 6.87 0.88 The returns of each series may differ from one another for a 0% -0.73 number of reasons, including if the series was not issued -2.37 -3.32 -1.86 -7.80 and outstanding for the entire reporting period and because -15% of the different levels of management fees and expenses allocated and payable by each series. -30% 20042005 2006 2007 2008 2009 2010 2011 2012 2013

On May 10, 2006, PIMCO Canada Corp. replaced AGF Funds Series I Inc. as the portfolio manager for the Fund, and the investment objectives were changed to provide a fixed 30% 18.00 monthly distribution and capital appreciation potential by 16.40 15% investing primarily in debt instruments issued by 9.15 governments and corporations from around the world. In 0.35 1.50 0% order to achieve higher yields, the Fund also changed its investment strategies to allow it to invest in debt -9.31 -15% instruments that may have ratings that are lower than investment grade, as determined by bond rating services, -30% such as Standard & Poor’s Rating Service. 2001† 20022008(1) 2009 2010 2011 2012 2013

On April 15, 2011, the investment strategies of the Fund were Series F changed to reflect the fact that the Fund will invest in a more 30% 25.75 broad mix of global fixed income securities than high yield 14.52 16.02 debt securities. 15% These changes could have affected the performance of the 0% Fund had they been in effect throughout the performance -1.34 -0.15 measurement periods presented. -15%

-30% 2001† 2002 20032009(2) 2010 2011 2012 2013

Advisor Series

30% 25.36

15.41 15% 13.93

0% -1.85 -0.72

-15%

-30% 2001† 2002 20032009(2) 2010 2011 2012 2013 (1) For the period beginning May 9, 2008 to September 30, 2008. (2) For the period beginning November 3, 2008 to September 30, 2009. BMO Global Strategic Bond Fund

Annual Compound Returns As noted above, the table shows a comparison of the This table compares the historical annual compound historical annual compound returns of the Fund with the returns of the Fund with its blended benchmark (composed BOAML Global High Yield BB-B Constrained Index of 50% Bank of America Lynch (“BOAML”) Global (C$ hedged), a broad-based index. The Fund, however, uses High Yield BB-B Constrained Index (C$ hedged) and 50% a blended benchmark to compare its overall relative JP Morgan Emerging Markets Bond Index Global (“JP EMBI performance. The reason for this is that the blended Global”) (C$ hedged)). It also compares the Fund’s benchmark is a better reflection of the asset mix of the historical annual compound returns with the BOAML underlying investments within the Fund’s portfolio. Global High Yield BB-B Constrained Index (C$ hedged), a Accordingly, the blended benchmark is a more accurate and broad-based index. useful comparison.

The BOAML Global High Yield BB-B Constrained Index (C$ A commentary on the market and/or information regarding hedged) tracks the performance of U.S. dollar, Canadian dollar, the relative performance of the Fund as compared to its British pound and Euro-denominated below investment grade benchmark can be found under the Results of Operations corporate debt publicly issued in their own domestic markets. section of this report.

The JP EMBI Global (C$ hedged) includes U.S. dollar- denominated Brady Bonds, Eurobonds and traded loans issued by sovereign and quasi-sovereign entities for a broad range of emerging markets.

Series A 1 3 5 10 Since year years years years Inception BMO Global Strategic Bond Fund % -0.73 3.98 6.48 2.34 Blended Benchmark % 1.83 7.53 10.82 8.10 BOAML Global High Yield BB-B Constrained Index (C$ hedged) % 7.82 9.31 12.08 7.84

Series I 1 3 5 10 Since year years years years Inception(1) BMO Global Strategic Bond Fund % 1.50 6.32 8.84 6.22 Blended Benchmark % 1.83 7.53 10.82 8.14 BOAML Global High Yield BB-B Constrained Index (C$ hedged) % 7.82 9.31 12.08 8.85

Series F 1 3 5 10 Since year years years years Inception(2) BMO Global Strategic Bond Fund % -0.15 4.55 10.68 Blended Benchmark % 1.83 7.53 15.39 BOAML Global High Yield BB-B Constrained Index (C$ hedged) % 7.82 9.31 16.75

Advisor Series 1 3 5 10 Since year years years years Inception(2) BMO Global Strategic Bond Fund % -0.72 3.99 10.13 Blended Benchmark % 1.83 7.53 15.39 BOAML Global High Yield BB-B Constrained Index (C$ hedged) % 7.82 9.31 16.75

(1) Return from May 9, 2008 to September 30, 2013. (2) Return from November 3, 2008 to September 30, 2013. BMO Global Strategic Bond Fund

SUMMARY OF INVESTMENT PORTFOLIO As at September 30, 2013 % of Net % of Net Portfolio Allocation Asset Value Top 25 Holdings Asset Value United States 43.2 Aleris International Inc., Senior, Unsecured, Brazil 8.5 Notes, Callable, 7.875% Nov 1, 2020 1.1 Russia 8.0 Majapahit Holding BV, Series 144A, Senior, Luxembourg 6.2 Unsecured, Notes, 8.000% Aug 7, 2019 1.1 Venezuela 5.6 Phones4u Finance plc, Senior, Secured, Cash/Receivables/Payables 4.9 Notes, Callable, 9.500% Apr 1, 2018 1.1 United Kingdom 4.6 OAO Novatek via Novatek Finance Limited, Series 144A, Other 4.4 Loan Participation Notes, Senior, Unsecured, 6.604% Feb 3, 2021 1.1 Indonesia 2.9 VTB Capital S.A., Series 4, Loan Participation Notes, South Africa 1.9 Senior, Secured, Putable, 6.875% May 29, 2018 1.1 United Arab Emirates 1.8 DP World Ltd., Euro Medium Term Notes, Senior, Ireland 1.6 Unsecured, Unsubordinated, 6.850% Jul 2, 2037 1.0 Spain 1.5 Voto-Votorantim Ltd., Senior, Unsecured, Notes, 6.750% Apr 5, 2021 1.0 Peru 1.4 DaVita, Inc., Term Loan, Floating Rate, Nov 1, 2019 1.0 Canada 1.3 Dell Inc., Bridge Term Loan, Floating Rate, Nov 6, 2013 1.0 Mexico 1.2 Gaz Capital S.A., Series 2, Senior, Unsecured, Notes, Cayman Islands 1.0 Unsubordinated, Loan Participation, 8.625% Apr 28, 2034 1.0 Total Portfolio Allocation 100.0 AngloGold Ashanti Holdings PLC, Senior, Notes, 5.375% Apr 15, 2020 0.9 Top Holdings as a Percentage of Total Net Asset Value 39.1 % of Net Total Net Asset Value $525,650,527 Top 25 Holdings Asset Value Issuer The summary of investment portfolio may change due to the Fund’s ongoing Cash/Receivables/Payables 4.9 portfolio transactions. Updates are available quarterly. Petroleos de Venezuela S.A., Senior, Unsecured, Notes, Callable, 5.375% Apr 12, 2027 4.3 Petrobras International Finance Company, Senior, Unsecured, Notes, Unsubordinated, 7.875% Mar 15, 2019 3.6 SLM Corporation, Medium Term Notes, Senior, Unsecured, Unsubordinated, 8.450% Jun 15, 2018 1.9 HCA, Inc., Senior, Secured, Notes, 6.500% Feb 15, 2020 1.5 Dell Inc., Bridge Term Loan, Floating Rate, Nov 6, 2013 1.5 Xunta de Galicia, Senior, Unsecured, Notes, 5.763% Apr 3, 2017 1.5 TNK-BP Finance S.A., Senior, Unsecured, Unsubordinated, 7.250% Feb 2, 2020 1.4 HBOS PLC, Euro Medium Term Notes, Senior, Subordinated, 5.374% Jun 30, 2021 1.2 Alrosa Finance SA, Series 144A, Notes, 7.750% Nov 3, 2020 1.2 AES Corporation, The, Senior, Unsecured, Notes, 8.000% Jun 1, 2020 1.2 Gazprom via Gaz Capital S.A., Series 9, Loan Participation Notes, Senior, Unsecured, 6.510% Mar 7, 2022 1.2 Ally Financial Inc., Senior, Notes, 6.250% Dec 1, 2017 1.2 American International Group, Inc., Fixed to Floating, Junior, Subordinated, Debentures, Callable, 8.175% May 15, 2058 1.1 www.bmo.com/mutualfunds BMO Investments Inc. First Canadian Place, 43rd Floor, 100 King Street West Toronto, ON M5X 1A1 For more information please call 1-800-665-7700

This document may contain forward-looking statements relating to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent our beliefs regarding future events. By their nature, forward-looking statements require us to make assump- tions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed or implied in the forward-looking statements. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including but not limited to market and general economic conditions, interest rates, regulatory and statutory developments, the effects of competition in the geographic and business areas in which the Fund may invest in and the risks detailed from time to time in BMO Mutual Funds’ simplified prospectus. We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking state- ments to make decisions with respect to investing in the Fund, investors and others should carefully consider these factors, as well as other uncer- tainties and potential events, and the inherent uncertainty of forward-looking statements. Due to the potential impact of these factors, BMO Investments Inc. does not undertake, and specifically disclaims, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal.