BMO Mutual Funds 2021 Semi-Annual Financial Statements

March 31, 2021

BMO Precious Metals Fund

NOTICE OF NO AUDITOR REVIEW OF THE SEMI-ANNUAL FINANCIAL STATEMENTS BMO Investments Inc., the Manager of the Fund, appoints independent auditors to audit the Fund’s Annual Financial Statements. Under Canadian securities laws (National Instrument 81-106), if an auditor has not reviewed the Semi-Annual Financial Statements, this must be disclosed in an accompanying notice. The Fund’s independent auditors have not performed a review of these Semi-Annual Financial Statements in accordance with standards established by the Chartered Professional Accountants of Canada.

BMO Precious Metals Fund (unaudited)

STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME (All amounts in thousands of Canadian dollars, except per unit data) (All amounts in thousands of Canadian dollars, except per unit data)

March 31 September 30 March 31 March 31 As at 2021 2020 For the periods ended 2021 2020

ASSETS INCOME Interest income (2) 7 CURRENT ASSETS Dividend income 811 322 Cash 1,889 767 Other changes in fair value of investments and Investments derivatives Non-derivative financial assets 80,957 100,904 Net realized gain 4,016 1,586 Receivable for investments sold 0 — Change in unrealized depreciation (29,290) (9,561) Subscriptions receivable 78 246 Dividends receivable 204 62 Net loss in fair value of investments and derivatives (24,465) (7,646) Total assets 83,128 101,979 Securities lending revenue (note 8) 9 4 LIABILITIES Foreign exchange loss (0) (5) CURRENT LIABILITIES Total other income (loss) 9 (1) Payable for investments purchased — 0 Total loss (24,456) (7,647) Redemptions payable 163 160 Accrued expenses 144 15 EXPENSES Management fees (note 6) 858 755 Total liabilities 307 175 Fixed administration fees (note 6) 85 75 Net assets attributable to holders of Independent review committee fees (note 6) 0 0 redeemable units 82,821 101,804 Withholding taxes 49 10 Fund facts fees 0 0 Net assets attributable to holders of redeemable units Unitholder reporting costs 0 — Series A Units 53,856 66,563 Commissions and other portfolio transaction Advisor Series Units 6,106 8,115 costs (note 6) 19 51 Series F Units 4,738 6,259 Operating expenses absorbed by the Manager Series D Units 12,761 16,811 (note 6) (0) (1) Series I Units 5,360 4,056 Total expenses 1,011 890 Net assets attributable to holders of redeemable units per unit Decrease in net assets attributable to Series A Units $ 23.68 $ 31.32 holders of redeemable units (25,467) (8,537) Advisor Series Units $ 28.54 $ 37.75 Series F Units $ 19.63 $ 25.80 Decrease in net assets attributable to holders of redeemable units Series D Units $ 13.90 $ 18.31 Series A Units (16,908) (5,667) Series I Units $ 9.64 $ 12.60 Advisor Series Units (2,002) (651) Series F Units (1,371) (454) Series D Units (4,065) (1,478) Series I Units (1,121) (287) Decrease in net assets attributable to holders of redeemable units per unit (note 8) Series A Units (7.64) (2.33) Advisor Series Units (9.24) (3.05) Series F Units (6.13) (1.61) Series D Units (4.40) (1.53) Series I Units (2.68) (1.09)

The accompanying notes are an integral part of these financial statements. BMO Precious Metals Fund (unaudited)

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (All amounts in thousands of Canadian dollars)

March 31 March 31 March 31 March 31 For the periods ended 2021 2020 For the periods ended 2021 2020

Series A Units Series D Units Net assets attributable to holders of Net assets attributable to holders of redeemable units at beginning of period 66,563 62,824 redeemable units at beginning of period 16,811 2,329 Decrease in net assets attributable to holders of Decrease in net assets attributable to holders of redeemable units (16,908) (5,667) redeemable units (4,065) (1,478) Redeemable unit transactions Redeemable unit transactions Proceeds from redeemable units issued 11,334 7,993 Proceeds from redeemable units issued 1,465 13,767 Redemption of redeemable units (7,133) (22,461) Redemption of redeemable units (1,450) (3,572) Net increase (decrease) from redeemable unit Net increase from redeemable unit transactions 4,201 (14,468) transactions 15 10,195 Net decrease in net assets attributable to Net (decrease) increase in net assets holders of redeemable units (12,707) (20,135) attributable to holders of redeemable units (4,050) 8,717 Net assets attributable to holders of Net assets attributable to holders of redeemable units at end of period 53,856 42,689 redeemable units at end of period 12,761 11,046

Advisor Series Units Series I Units Net assets attributable to holders of Net assets attributable to holders of redeemable units at beginning of period 8,115 6,033 redeemable units at beginning of period 4,056 1,726 Decrease in net assets attributable to holders of Decrease in net assets attributable to holders of redeemable units (2,002) (651) redeemable units (1,121) (287) Redeemable unit transactions Redeemable unit transactions Proceeds from redeemable units issued 699 867 Proceeds from redeemable units issued 2,425 1,200 Redemption of redeemable units (706) (1,382) Net increase from redeemable unit Net decrease from redeemable unit transactions 2,425 1,200 transactions (7) (515) Net increase in net assets attributable to Net decrease in net assets attributable to holders of redeemable units 1,304 913 holders of redeemable units (2,009) (1,166) Net assets attributable to holders of Net assets attributable to holders of redeemable units at end of period 5,360 2,639 redeemable units at end of period 6,106 4,867

Total Fund Series F Units Net assets attributable to holders of Net assets attributable to holders of redeemable units at beginning of period 101,804 78,027 redeemable units at beginning of period 6,259 5,115 Decrease in net assets attributable to holders of Decrease in net assets attributable to holders of redeemable units (25,467) (8,537) redeemable units (1,371) (454) Redeemable unit transactions Redeemable unit transactions Proceeds from redeemable units issued 17,123 25,055 Proceeds from redeemable units issued 1,200 1,228 Redemption of redeemable units (10,639) (29,468) Redemption of redeemable units (1,350) (2,053) Net increase (decrease) from redeemable unit Net decrease from redeemable unit transactions 6,484 (4,413) transactions (150) (825) Net decrease in net assets attributable to Net decrease in net assets attributable to holders of redeemable units (18,983) (12,950) holders of redeemable units (1,521) (1,279) Net assets attributable to holders of Net assets attributable to holders of redeemable units at end of period 82,821 65,077 redeemable units at end of period 4,738 3,836

The accompanying notes are an integral part of these financial statements. BMO Precious Metals Fund (unaudited)

STATEMENT OF CASH FLOWS (All amounts in thousands of Canadian dollars)

March 31 March 31 For the periods ended 2021 2020

Cash flows from operating activities Decrease in net assets attributable to holders of redeemable units (25,467) (8,537) Adjustments for: Foreign exchange loss (gain) on cash 0 (3) Net realized gain on sale of investments and derivatives (4,016) (1,586) Change in unrealized depreciation of investments and derivatives 29,290 9,561 Increase in dividends receivable (142) (51) Increase in accrued expenses 129 106 Amortization of premium and discounts (0) (3) Purchases of investments (15,137) (24,444) Proceeds from sale and maturity of investments 9,810 28,643 Net cash (used in) from operating activities (5,533) 3,686

Cash flows from financing activities Proceeds from issuances of redeemable units 17,157 11,447 Amounts paid on redemption of redeemable units (10,502) (15,896) Net cash from (used in) financing activities 6,655 (4,449)

Foreign exchange (loss) gain on cash (0) 3 Net increase (decrease) in cash 1,122 (763) Cash at beginning of period 767 2,032 Cash at end of period 1,889 1,272

Supplementary Information Interest (paid) received, net of withholding taxes* (2) 4 Dividends received, net of withholding taxes* 620 261 * These items are from operating activities.

The accompanying notes are an integral part of these financial statements. BMO Precious Metals Fund (unaudited)

SCHEDULE OF INVESTMENT PORTFOLIO As at March 31, 2021 (All amounts in thousands of Canadian dollars, unless otherwise noted)

Fair Fair Number of Cost+ Value Number of Cost+ Value Shares or Units ($) ($) Shar es or Units ($) ($)

EQUITIES Royal Gold, Inc...... 5,000...... 729 ...... 676 Australia — 8.9% ...... 6,801...... 9,113 Evolution Limited ...... 157,500...... 564...... 620 Lachlan Star Limited...... 120,000...... 891 ...... 4 Total Investment Portfolio — 97.7%...... 70,029...... 80,957 Newcrest Mining Limited...... 119,700...... 3,175...... 2,816 Other Assets Less Liabilities — 2.3%...... 1,864 Perseus Mining Limited...... 308,300...... 408...... 319 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS — 100.0% ...... 82,821

Ramelius Resources Limited ...... 906,800...... 1,689...... 1,291 + Where applicable, distributions received from holdings as a return of capital are used to reduce the Regis Resources Limited ...... 123,800...... 501...... 345 adjusted cost base of the securities in the portfolio. Silver Lake Resources Limited ...... 1,377,300...... 2,923...... 1,989 ...... 10,151...... 7,384

Canada — 72.3% Agnico Eagle Mines Limited...... 40,284 ...... 3,201 ...... 2,927 Alamos Gold Inc., Class A...... 36,600 ...... 399...... 359 B2Gold Corp...... 934,700 ...... 3,404 ...... 5,057 Corporation ...... 310,300...... 6,618 ...... 7,736 Centerra Gold Inc...... 126,400 ...... 1,076 ...... 1,406 Dundee Precious Metals Inc...... 263,200...... 1,940 ...... 2,019 Endeavour Mining Corporation...... 64,600...... 2,027 ...... 1,636 Equinox Gold Corp., Warrants, Oct 6, 2021...... 150,000...... — ...... 28 Franco-Nevada Corporation ...... 49,642 ...... 6,490...... 7,818 Gran Colombia Gold Corp...... 99,800 ...... 705 ...... 538 Karora Resources, Inc...... 219,500 ...... 765 ...... 744 Corporation...... 624,200 ...... 4,036 ...... 5,224 Ltd...... 58,909 ...... 464 ...... 2,500 Lundin Gold Inc...... 249,800 ...... 2,791 ...... 2,458 MAG Silver Corp...... 100,400 ...... 1,061 ...... 1,899 Marathon Gold Corporation...... 238,900 ...... 563...... 533 Nighthawk Gold Corp...... 95,540 ...... 325 ...... 94 NovaGold Resources Inc...... 21,900...... 355 ...... 240 Ltd...... 17,100 ...... 262 ...... 237 Pan American Silver Corporation ...... 35,800 ...... 974 ...... 1,350 Pretium Resources Inc...... 18,700 ...... 206 ...... 244 Probe Metals Inc...... 438,500 ...... 535 ...... 592 Roxgold Inc...... 823,843 ...... 966 ...... 1,277 SilverCrest Metals Inc...... 75,000 ...... 396 ...... 763 SSR Mining Inc...... 137,794 ...... 1,641 ...... 2,476 Torex Gold Resources Inc...... 78,700 ...... 1,309 ...... 1,249 Wesdome Gold Mines Ltd...... 272,300...... 1,067 ...... 2,271 Corp...... 123,100...... 5,814 ...... 5,909 Yamana Gold Inc...... 58,000...... 287 ...... 317 ...... 49,677 ...... 59,901

Egypt — 0.6% Centamin plc...... 292,228 ...... 696 ...... 527

South Africa — 4.9% Gold Fields Limited, ADR...... 40,000 ...... 293 ...... 477 Sibanye-Stillwater, ADR...... 158,400 ...... 2,411 ...... 3,555 ...... 2,704...... 4,032

United States — 11.0% Hecla Mining Co...... 48,200 ...... 160 ...... 345 Newmont Corporation...... 106,833 ...... 5,912...... 8,092 BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 1. The Fund prepared in accordance with International Financial BMO Precious Metals Fund (the “Fund”) is an Reporting Standards (“IFRS”), as issued by the open-ended mutual fund established under the laws of International Accounting Standards Board ("IASB"). the province of Ontario by Declaration of Trust. The Master Declaration of Trust was amended on 2. Basis of preparation and presentation October 23, 2008 and November 3, 2009 to permit These unaudited interim financial statements have certain Funds to offer a multi-series structure. In been prepared in accordance with IFRS and in addition to the existing Series A Units, certain Funds accordance with International Accounting Standard are permitted to offer Series A Hedged Units, Advisor ("IAS") 34 - Interim Financial Reporting, as issued by Series Units, Advisor Series Hedged Units, ETF the IASB. The financial statements have been prepared Series Units, Series T4 Units, Series T5 Units, Series T6 on a historic cost basis, except for the revaluation of Units, Series T8 Units, Series M Units, Series F Units, financial assets and financial liabilities (including Series F Hedged Units, Series F2 Units, Series F4 Units, derivative financial instruments) measured at fair value Series F6 Units, Series D Units, Series G Units, Series I through profit or loss ("FVTPL"). Certain prior period Units, Series N Units, Series NBA Units, Series O Units, balances may have been reclassified to conform with Series L Units, Series R Units, Series S Units and/or the current period presentation. Classic Series Units. Each series is intended for 3. Summary of significant accounting policies different kinds of investors and has different Financial Instruments management fees and fixed administration fees. Refer Financial instruments include financial assets and to Note 8 for the series issued for this Fund as well as financial liabilities such as equity and debt securities, the management and administration fee rates for each investment funds and derivatives. These investments series. are part of a group of financial instruments that are BMO Investments Inc. (“the Manager”) is the Manager managed and their performance is evaluated on a fair and Trustee of the Fund. The Manager is a wholly value basis and in accordance with the Fund's owned subsidiary of . The address of investment strategy. the Fund’s registered office is 100 King Street West, The Fund classifies and measures financial Toronto, Ontario, M5X 1A1. instruments in accordance with IFRS 9 Financial The Statement of Financial Position and related notes Instruments (“IFRS 9”). Upon initial recognition, for the Fund are as at March 31, 2021 and September 30, financial instruments are recorded at fair value. A 2020, as applicable. The Statement of Comprehensive financial instrument is recognized when the Fund Income, Statement of Changes in Net Assets becomes a party to the contractual requirements of the Attributable to Holders of Redeemable Units, Statement instrument and is derecognized when the right to of Cash Flows and related notes are for the period(s) receive cash flows from the instrument has expired or ended March 31, 2021 and March 31, 2020, except for a the Fund has transferred substantially all risks and Fund established during the period(s), which is rewards of ownership. As such, investment purchase presented from the date of inception (as noted in and sale transactions are recorded as of the trade date. Note 8) to March 31 of the applicable period. Financial Investments and derivatives are subsequently information provided for a series established during the measured at FVTPL, with changes in fair value period(s) is presented from the inception date as noted recognized in the Statement of Comprehensive Income in Note 8 to March 31 of the applicable period. as “Change in unrealized appreciation (depreciation)”. These financial statements were authorized for All financial assets and financial liabilities are issuance by the Board of Directors of the Manager on recognized in the Statement of Financial Position. May 5, 2021. The Fund’s outstanding redeemable units, which are These financial statements should be read in puttable instruments, are entitled to a contractual conjunction with the annual financial statements for obligation of annual distribution of any net income and the period ended September 30, 2020, which have been net realized capital gains by the Fund. This annual distribution can be in cash at the option of the unitholders, and therefore the ongoing redemption BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 feature is not the redeemable units’ only contractual The Fund may enter into forward currency contracts obligation. Also, the Fund has issued multiple series of for hedging purposes either directly or indirectly or for redeemable units, which are equally subordinated but non-hedging purposes. The fair value of forward are not identical and consequently, do not meet the currency contracts entered into by the Fund is recorded conditions to be classified as equity. As a result, the as the difference between the fair value of the contract Fund’s obligations for net assets attributable to holders on the Valuation Date and the fair value on the date the of redeemable units (“Net Assets”) are classified as contract originated. financial liabilities and presented at the redemption For the Series A Hedged Units, Advisor Series Hedged amounts. Units and Series F Hedged Units (the “Hedged Series”), Cost of investments the Fund enters into forward currency contracts to The cost of investments represents the amount paid for hedge against foreign currency exposure and as a result each security and is determined on an average cost the Hedged Series will be subject to less currency risk basis, and excludes commissions and other portfolio than the other series of the Fund because their foreign transaction costs, which are reported separately in the currency exposure is hedged. However, the hedging Statement of Comprehensive Income. Realized gains strategy may not achieve a perfect hedge of the foreign and losses on disposition are determined based on the currency exposure for the Hedged Series. cost of the investments. The Fund may engage in option contract transactions Fair value measurement by purchasing (long positions) or writing (short Fair value is defined as the price that would be received positions) call or put option contracts. These contracts to sell an asset or paid to transfer a liability in an have different risk exposures for the Fund, whereas the orderly transaction between market participants at the risk for long positions will be limited to the premium measurement date. paid to purchase the option contracts, the risk exposure for the short positions are potentially unlimited until For exchange-traded securities, close prices are closed or expired. considered to be fair value if they fall within the bid-ask spread. In circumstances where the close price is not The premium paid for purchasing an option is included within the bid-ask spread, the Manager determines the in "Derivative assets" in the Statement of Financial point within the bid-ask spread that is most Position. The option contract is valued on each representative of fair value based on the specific facts Valuation Date at an amount equal to the fair value of and circumstances. the option that would have the effect of closing the position. The change in the difference between the Procedures are in place to fair value equities traded in premium and the fair value is shown as “Change in countries outside of North America daily, to avoid stale unrealized appreciation (depreciation)” in the prices and to take into account, among other things, Statement of Comprehensive Income. any significant events occurring after the close of a foreign market. When a purchased option expires, the Fund will realize a loss equal to the premium paid. When a purchased For bonds, debentures, asset-backed securities and option is closed, the gain or loss the Fund will realize other debt securities, fair value is determined as the last will be the difference between the proceeds and the traded market price or close price, or other such prices, premium paid. When a purchased call option is that falls within the bid-ask spread of the security. exercised, the premium paid is added to the cost of Short-term investments, if any, are held at amortized acquiring the underlying security. When a purchased cost, which approximates fair value due to their put option is exercised, the premium paid is subtracted short-term nature. from the proceeds from the sale of the underlying Mutual fund units held as investments are valued at security that had to be sold. their respective Net Asset Value (“NAV”) on each The premium received from writing an option is Valuation Date (the “Valuation Date” is each day on included in "Derivative liabilities" in the Statement of which the is open for trading), Financial Position. as these values are the most readily and regularly available. BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 When a written option expires, the Fund will realize a Credit default swap contracts are fair valued daily gain equal to the premium received. When a written based upon quotations from independent security option is closed, the Fund will realize a gain or loss pricing sources. Premiums paid or received, if any, are equal to the difference between the cost at which the included in “Net realized gain (loss)” in the Statement contract was closed and the premium received. When a of Comprehensive Income. Net periodic payments are written call option is exercised, the premium received accrued daily and recorded as “Derivative income is added to the proceeds from the sale of the underlying (loss)” in the Statement of Comprehensive Income. investments to determine the realized gain or loss. When credit default swap contracts expire or are closed When a written put option is exercised, the premium out, gains or losses are recorded as “Net realized gain received will be subtracted from the cost of the (loss)” in the Statement of Comprehensive Income. underlying investments the Fund had to purchase. Interest rate swap contracts are agreements between The gain or loss that the Fund realizes when a two parties to exchange periodic interest payments purchased or written option is expired or closed is based on a notional principal amount. The net periodic recorded as “Net realized gain (loss)” in the Statement payments received or paid from interest rate swap of Comprehensive Income. contracts are recorded as “Derivative income (loss)” in the Statement of Comprehensive Income. Payments Futures contracts are financial agreements to purchase received or paid when the Fund enters into the contract or sell a financial instrument at a contracted price on a are recorded as a liability or asset in the Statement of specified future date. Futures contracts are valued at Financial Position. When the contract is terminated or the gain or loss that would arise as a result of closing expires, the payments received or paid are recorded as the position at the Valuation date. Changes in this value “Net realized gain (loss)” in the Statement of on each Valuation Date is recorded as “Derivative Comprehensive Income. Payments received or paid income (loss)” in the Statement of Comprehensive upon early termination are recorded as “Net realized Income. Treasury bills or cash are held as margin gain (loss)” in the Statement of Comprehensive Income. against futures contracts. Interest rate swap agreements are valued based upon A credit default swap contract is an agreement to quotations from independent sources. The change in transfer credit risk from one party, a buyer of value is included in “Change in unrealized protection, to another party, a seller of protection. The appreciation (depreciation)” in the Statement of Fund, as a seller of protection, would be required to pay Comprehensive Income. a notional or other agreed upon value to the buyer of protection in the event of a default by a third-party. In The Fund enters into interest rate swap agreements to return, the Fund would receive from the counterparty a manage the exposure to interest rates. periodic stream of payments over the term of the Unlisted warrants, if any, are valued based on a pricing contract provided that no event of default occurs. If no model which considers factors such as the market default occurs, the Fund would keep the stream of value of the underlying security, strike price and terms payments and would have no payment obligations. of the warrant. In connection with the agreement, securities or cash For securities where market quotes are not available, may be identified as collateral or margin in accordance unreliable or not considered to reflect the current with the terms of the agreement to provide assets of value, the Manager may determine another value value in the event of default or bankruptcy/insolvency. which it considers to be fair and reasonable, or use a The Fund, as a buyer of protection, would receive a valuation technique that, to the extent possible, makes notional or other agreed upon value from the seller of maximum use of inputs and assumptions based on protection in the event of a default by a third-party. In observable market data including volatility, return, the Fund would be required to pay to the comparable companies, NAV (for exchange-traded counterparty a periodic stream of payments over the funds) and other applicable rates or prices. These term of the contract provided that no event of default estimation techniques include discounted cash flows, occurs. internal models that utilize observable data or BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 comparisons with other securities that are substantially distribution receivable from investment trusts, payable similar. In limited circumstances, the Manager may use for investments purchased, redemptions payable, internal models where the inputs are not based on distributions payable and accrued expenses. These observable market data. financial assets and financial liabilities are short-term in nature and are measured at amortized cost, which The Fund enters into To-Be-Announced securities approximates their fair value. ("TBA") to gain exposure to the underlying mortgage-backed securities ("MBS"), and may or may Investments in subsidiaries, joint ventures and associates not take delivery at maturity. TBA securities are Subsidiaries are entities over which the Fund has typically sold one to three months in advance of control through its exposure or rights to variable issuance, prior to the identification of the underlying returns from its investment and has the ability to affect pools of mortgage securities but with the interest those returns through its power over the entity. The payment provisions fixed in advance. The underlying Manager has determined that the Fund is an pools of mortgage securities are identified shortly investment entity and as such, it accounts for before settlement and must meet certain parameters. subsidiaries, if any, at fair value. Joint ventures are As such, the TBA securities do not have a known investments where the Fund exercises joint control maturity date as of year-end. Losses may arise due to through an agreement with other shareholders, and changes in the value of the underlying securities, associates are investments in which the Fund exerts failure of the counterparty to perform under the significant influence over operating, investing, and contract, or if the issuer fails to issue the MBS due to financing decisions (such as entities in which the Fund political, economic or other factors. TBA securities are owns 20% - 50% of voting shares), all of which, if any, fair valued based upon quotations from independent have been classified at FVTPL. security pricing sources. Any gain or loss from selling the TBA security before the underlying MBS is Unconsolidated structured entities delivered is recorded as "Net realized gain (loss)" and The Manager has determined that the underlying funds any unrealized gain or loss from changes in the fair in which the Fund may invest are unconsolidated value of the TBA security held is recorded as "Change structured entities. This determination is based on the in unrealized appreciation (depreciation)" in the fact that decision making about the underlying funds is Statement of Comprehensive Income. not governed by the voting right or other similar right held by the Fund. Similarly, investments in The Fund may enter into investment loan securitizations, asset-backed securities and commitments, of which all or a portion may be mortgage-backed securities are determined to be unfunded as of the reporting date. Unfunded loan interests in unconsolidated structured entities. commitments are contractual obligations for funding, which the Fund may be obligated to make to the The Fund may invest in underlying funds whose borrower on demand. The funded portion of the loan investment objectives range from achieving short-term commitment is shown on the Schedule of Investment to long-term income and capital growth potential. Portfolio. Additional information on the Fund’s Underlying funds may use leverage in a manner unfunded loan commitments, where applicable, is consistent with their respective investment objectives provided in Note 8. and as permitted by Canadian securities regulatory authorities. Underlying funds finance their operations Cash by issuing redeemable units which are puttable at the Cash is comprised of cash and deposits with banks, holders’ option and entitles the holder to a which include bankers’ acceptances and overnight proportionate stake in the respective fund’s Net Assets. demand deposits. The carrying amount of cash The change in fair value of each of the underlying approximates its fair value because it is short-term in funds during the periods is included in “Change in nature. unrealized appreciation (depreciation)” in the Other assets and other liabilities Statement of Comprehensive Income. Other assets and other liabilities generally include Mortgage-related securities are created from pools of receivables for investments sold, subscriptions residential or commercial mortgage loans, including receivable, interest receivable, dividend receivable, mortgage loans made by savings and loan institutions, BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 mortgage bankers, commercial banks and others. date. Interest is accrued on each Valuation Date based Asset-backed securities are created from many types of on the inflation adjusted par value at that time and is assets, including auto loans, credit card receivables, included in “Interest income” in the Statement of home equity loans and student loans. Comprehensive Income. The Fund does not provide and has not committed to Foreign currency translation providing any additional significant financial or other The fair value of investments and other assets and support to the unconsolidated structured entities other liabilities in foreign currencies are translated into the than its investment in the unconsolidated structured Fund’s functional currency at the rates of exchange entities. prevailing at the period-end date. Purchases and sales Additional information on the Fund’s interest in of investments, and income and expenses are unconsolidated structured entities, where applicable, is translated at the rates of exchange prevailing on the provided in Note 8. respective dates of such transactions. Realized and unrealized foreign exchange gains (losses) on Offsetting of financial assets and financial liabilities investment transactions are included in “Net realized Financial instruments are presented at net or gross gain (loss)” and in "Change in unrealized appreciation amounts in the Statement of Financial Position (depreciation)" respectively, in the Statement of depending on the existence of intention and legal right Comprehensive Income. Foreign exchange gains to offset opposite positions of such instruments held (losses) relating to cash, receivables and payables are with the same counterparties. Amounts offset in the included in "Foreign exchange gain (loss)" in the Statement of Financial Position are related to Statement of Comprehensive Income. transactions for which the Fund has legally enforceable Securities lending rights to offset and intends to settle the positions on a net basis. Amounts not offset in the Statement of A Fund may engage in securities lending pursuant to Financial Position relate to positions where there is no the terms of an agreement with State Street (the legally enforceable right to offset, or the legal right to “securities lending agent”). The aggregate market value offset is only in the event of default, insolvency or of all securities loaned by the Fund cannot exceed 50% bankruptcy, or where the Fund has no intention to of the NAV of the Fund. The Fund will receive collateral settle on a net basis. Refer to Note 8 for details. of at least 102% of the value of securities on loan. Collateral will generally be comprised of obligations of Income recognition or guarantee by the Government of Canada or a Dividend income and distributions received from province thereof, or by the United States government or investment trusts are recognized on the ex-dividend its agencies, but it may include obligations of other and ex-distribution date, respectively. governments with appropriate credit ratings. Further, the program entered into provides for 100% Interest income from interest bearing investments is indemnification by the securities lending agent and recognized in the Statement of Comprehensive Income parties related to the Fund’s custodian, to the Fund for using the effective interest rate. Interest receivable any defaults by borrowers. shown in the Statement of Financial Position is accrued based on the interest bearing investments’ stated rates For those Funds participating in the program, aggregate of interest. values of securities on loan, the collateral held as at March 31, 2021 and September 30, 2020 and Interest on inflation-indexed bonds is paid based on a information about the security lending income earned principal value, which is adjusted for inflation. The by the Fund are disclosed in Note 8, where applicable. inflation adjustment of the principal value is recognized as part of interest income in the Statement Income from securities lending, where applicable, is of Comprehensive Income. If held to maturity, the Fund included in the Statement of Comprehensive Income will receive, in addition to a coupon interest payment, a and is recognized when earned. The breakdown of the final payment equal to the sum of the par value and the securities lending income is disclosed in Note 8, where inflation compensation accrued from the original issue applicable. BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 Short-term trading penalty practices, type of portfolio securities and management To discourage excessive trading, the Fund may, at the fees and other expenses. Where applicable, refer to Manager’s sole discretion, charge a short-term trading Note 8 for the details of any fund merger transactions. penalty. This penalty is paid directly to the Fund and is included in “Short-term penalty fees” in the Statement 4. Critical accounting judgements and estimates of Comprehensive Income. The preparation of financial statements requires the use of judgement in applying the Fund's accounting Increase or decrease in net assets attributable to holders of policies and to make estimates and assumptions about redeemable units per unit the future. The following discusses the most significant “Increase (decrease) in net assets attributable to accounting judgements and estimates that the Manager holders of redeemable units per unit” of a series in the has made in preparing the Fund's financial statements. Statement of Comprehensive Income represents the increase (decrease) in net assets attributable to holders Accounting judgements: of redeemable units of the series divided by the Functional and presentation currency weighted average number of units of the series The Fund’s unitholders are mainly Canadian residents, outstanding during the period. Refer to Note 8 for with the subscriptions and redemptions of the details. redeemable units denominated in Canadian dollars. The Fund invests in Canadian and U.S. dollars and Taxation other foreign denominated securities, as applicable. The Fund qualifies as a unit trust under the provisions The performance of the Fund is measured and reported of the Income Tax Act (Canada). Distributions of all net to the investors in Canadian dollars. The Manager taxable income and sufficient amounts of net realized considers the Canadian dollar as the currency that most capital gains for each taxation year will be paid to faithfully represents the economic effects of the unitholders so that the Fund will not be subject to underlying transactions, events and conditions. The income tax. As a result, the Manager has determined financial statements are presented in Canadian dollars, that the Fund is in substance not taxable and therefore which is the Fund's functional and presentation does not record income taxes in the Statement of currency. Comprehensive Income nor does it recognize any deferred tax assets or liabilities in the Statement of Classification and measurement of investment portfolio Financial Position. In classifying and measuring financial instruments held by the Fund, the Manager is required to make an The Fund may incur withholding taxes imposed by assessment of the Fund's business model for managing certain countries on investment income and capital financial instruments. In classifying and measuring gains. Such income and capital gains are recorded on a financial instruments held by the Fund, the Manager is gross basis with the related withholding taxes shown as required to make significant judgements in a separate expense in the Statement of Comprehensive determining the most appropriate classification in Income. accordance with IFRS 9. The Manager has assessed the Fund mergers Fund’s business model with respect to the manner in The Manager used the purchase method of accounting which financial assets and financial liabilities are for fund mergers. Under the purchase method of managed as a group and performance is evaluated on a accounting, one of the Funds in each merger is fair value basis, and has concluded that FVTPL in identified as the acquiring fund, and is referred to as accordance with IFRS 9 provides the most appropriate the "Continuing Fund", and the other Fund involved in measurement and presentation of the Fund’s the merger is referred to as the "Terminated Fund". In investment portfolio. The collection of principal and determining the acquirer, the Manager considered interest is incidental to the fair value business model. factors such as the comparison of the relative NAV of the funds as well as consideration of the continuation of certain aspects of the Continuing Fund such as: investment advisors, investment objectives and BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 Accounting estimates: 81-106 Investment Fund Continuous Disclosure for the Fair value measurement of securities not quoted in an purpose of processing unitholder transactions. Net active market Assets are determined in accordance with IFRS and The Fund has established policies and control may differ to the Funds' NAV. Where the Fund's NAV is procedures that are intended to ensure these estimates not equal to its Net Assets, a reconciliation is shown in are well controlled, independently reviewed, and Note 8. consistently applied from period to period. The Expenses directly attributable to a series are charged to estimates of the value of the Fund’s assets and that series. Other expenses, income, realized and liabilities are believed to be appropriate as at the unrealized gains and losses from investment reporting date. transactions are allocated proportionately to each The Fund may hold financial instruments that are not series based upon the relative NAV of each series. The quoted in active markets. Note 3 discusses the policies gain (loss) of certain forwards in Funds with Hedged used by the Fund for the estimates used in determining Series is allocated only to the hedged series. fair value. ETF Series Units 5. Units and unit transactions On any trading day, a designated broker or an ETF The redeemable units of the Fund are classified as dealer may place a subscription or redemption order financial liabilities. The units have no par value and are for an integral multiple of the prescribed number ETF entitled to distributions, if any. Upon redemption, a Series Units of the Fund as permitted by the Manager. unit is entitled to a proportionate share of the Fund’s If the subscription or redemption order is accepted, the NAV. The Fund is required to pay distributions in an Fund will issue or redeem ETF Series Units to/from the amount not less than the amount necessary to ensure designated broker or the ETF dealer by no later than the Fund will not be liable for income taxes on realized the third trading day after the date on which the capital gains, dividends and interest. The Fund has no subscription or redemption order is accepted, in the restrictions or specific capital requirements on the case of a fund that invests a portion of its portfolio subscriptions and redemptions of units except as assets in T+3 securities; by no later than the second disclosed in Note 8. The relevant movements in trading date after the date on which the subscription or redeemable units are shown in the Statement of redemption order is accepted, in the case of a fund that Changes in Net Assets Attributable to Holders of does not invest a portion of its portfolio assets in T+3 Redeemable Units. securities or a shorter period as may be determined by In accordance with its investment objectives and the Manager in response to changes in applicable law strategies, and the risk management practices outlined or general changes to settlement procedures in in Note 7, the Fund endeavours to invest the applicable markets. subscriptions received in appropriate investments, For each prescribed number of ETF Series Units issued while maintaining sufficient liquidity to meet or redeemed, a designated broker or an ETF dealer redemptions, with such liquidity being augmented by must deliver or receive payment consisting of: short-term borrowings or disposal of investments where necessary. • A basket of applicable securities and cash in an amount sufficient so that the value of the securities and Redeemable units of the Fund are offered for sale on a the cash received is equal to the NAV of the ETF continuous basis and may be purchased or redeemed Series Units subscribed/redeemed; on any Valuation Date at the NAV per unit of a particular series. The NAV per unit of a series for the • Cash in the amount equal to the NAV of the ETF purposes of subscription or redemption is computed by Series Units subscribed/redeemed; or dividing the NAV of the Fund attributable to the series • A combination of securities and cash, as determined (that is, the total fair value of the assets attributable to by the Manager, in an amount sufficient so that the the series less the liabilities attributable to the series) value of the securities and cash received is equal to the by the total number of units of the series of the Fund NAV of the ETF Series Units subscribed/redeemed. outstanding at such time on each Valuation Date, in accordance with Part 14 of National Instrument (“NI”) BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 On any trading day, unitholders may redeem ETF Fund, BMO International Value Fund, BMO Japan Series Units for cash or exchange ETF Series Units for Fund, BMO Covered Call Canada High Dividend ETF baskets of securities and cash. ETF Series Units Fund, BMO Concentrated Global Equity Fund, BMO redeemed for cash will be redeemed at a redemption Crossover Bond Fund, BMO Global Multi-Sector Bond price per ETF Series Unit equal to the lesser of (i) 95% Fund, BMO U.S. Small Cap Fund, BMO Multi-Factor of the closing price for the ETF Series Units on the TSX Equity Fund, BMO SIA Focused Canadian Equity Fund, on the effective day of the redemption; and (ii) the NAV BMO SIA Focused North American Equity Fund, BMO per unit of the ETF Series Units on the effective day of Concentrated U.S. Equity Fund and BMO Low Volatility the redemption. ETF Series Units exchanged for Canadian Equity ETF Fund (the “Variable Operating baskets of securities will be exchanged at a price equal Expense Series”), including audit and legal fees and to the NAV of the ETF Series Units on the effective day expenses; custodian and transfer agency fees; costs of the exchange request, payable by delivery of baskets attributable to the issue, redemption and change of of securities and cash. securities, including the cost of the securityholder record keeping system; expenses incurred in respect of Unitholders that redeem ETF Series Units prior to the preparing and distributing prospectuses, financial distribution record date will not be entitled to receive reports and other types of reports, statements and the distribution. communications to securityholders; fund accounting 6. Related party transactions and valuation costs; filing fees, including those (a) Management fees incurred by the Manager (collectively the The Manager is responsible for the day-to-day “Administration Expenses”). In return, the Fund pays a management of the Fund and its investment portfolio in fixed administration fee to the Manager. The fixed compliance with the Fund’s constating documents. The administration fee is calculated daily as a fixed annual Manager provides key management personnel to the percentage of the average NAV of the Fund. Refer to Fund, monitors and evaluates the performance of the Note 8 for the fixed administration fee rates charged to Fund, pays for the investment management services of the Fund, where applicable. the investment advisors and provides all related (c) Fund expenses administrative services required by the Fund. The Fund also pays certain operating expenses directly The management fees for the ETF Series includes costs ("Fund Expenses"), including expenses incurred in related to the administration expenses and other respect of preparing and distributing fund facts; operating expenses, other than the fund expenses. interest or other borrowing expenses; all reasonable costs and expenses incurred in relation to compliance As compensation for its services, the Manager is with NI 81-107, including compensation and expenses entitled to receive a fee payable monthly, calculated at payable to Independent Review Committee ("IRC") the maximum annual rates included in Note 8. members and any independent counsel or other (b) Fixed administration fees advisors employed by the IRC, the costs of the The Manager pays certain operating expenses of each orientation and continuing education of IRC members Fund except for BMO Ascent Income Portfolio, BMO and the costs and expenses associated with IRC Ascent Conservative Portfolio, BMO Ascent Balanced meetings; taxes of all kinds to which the Fund is or Portfolio, BMO Ascent Growth Portfolio, BMO Ascent might be subject; and costs associated with compliance Equity Growth Portfolio, BMO FundSelect Balanced with any new governmental or regulatory requirement Portfolio (Series NBA only), BMO FundSelect Growth introduced after December 1, 2007. Portfolio (Series NBA only), BMO FundSelect Equity The Manager may, in some years and in certain cases, Growth Portfolio (Series NBA only), BMO Covered Call absorb a portion of management fees, fixed Canadian Banks ETF Fund, BMO Covered Call administration fees or certain specified expenses of the U.S. High Dividend ETF Fund, BMO Covered Call Fund or series of the Fund. The decision to absorb Europe High Dividend ETF Fund, BMO Sustainable these expenses is reviewed periodically and Opportunities Global Equity Fund, BMO Tactical determined at the discretion of the Manager, without Global Asset Allocation ETF Fund, BMO Tactical notice to unitholders. Global Growth ETF Fund, BMO Women in Leadership BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 (d) Variable administration fees subsidiaries or affiliates of Bank of Montreal, the The Variable Operating Expense Series pay all of its purchase or redemption of units or shares of other Bank expenses directly. These operating expenses include of Montreal investment funds or the provision of Administration Expenses and Fund Expenses. services to the Manager.

(e) Commissions and other portfolio transaction costs 7. Financial instruments risks The Fund may execute trades with and through BMO The Fund’s activities expose it to a variety of risks Nesbitt Burns Inc., an affiliate of the Manager, based on associated with the financial instruments, as established standard brokerage agreements at market follows: market risk (including currency risk, interest prices. These fees are included in “Commissions and rate risk and other market risk), credit risk and liquidity other portfolio transaction costs” in the Statement of risk. The concentration table groups securities by asset Comprehensive Income. Refer to Note 8 for related type, geographic location and/or market segment. The party fees charged to the Fund during the period(s) Fund’s risk management practice outlines the ended March 31, 2021 and March 31, 2020, where monitoring of compliance to investment guidelines. applicable. The Manager manages the potential effects of these (f) Initial investments financial risks on the Fund’s performance by In order to establish a new Fund, the Manager, makes employing and overseeing professional and an initial investment in the Fund. Pursuant to the experienced portfolio managers that regularly monitor policies of the Canadian Securities Administrators, an the Fund’s positions, market events, and diversify initial investor cannot redeem its investments until an investment portfolios within the constraints of the additional $500 has been received from other investors investment guidelines. with respect to the same class of units. Refer to Note 8 Where the Fund invests in other investment fund(s), it for the investment in units of the Fund held by the may be indirectly exposed to the financial risks of the Manager as at March 31, 2021 and September 30, 2020, underlying fund(s), depending on the investment where applicable. objectives and the type of securities held by the (g) Other related party transactions underlying fund(s). The decision to buy or sell an From time to time, the Manager may on behalf of the underlying fund is based on the investment guidelines Fund, enter into transactions or arrangements with or and positions, rather than the exposure of the involving subsidiaries and affiliates of Bank of underlying fund(s). Montreal, or certain other persons or companies that (a) Currency risk are related or connected to the Manager of the Fund. Currency risk is the risk that the fair value of financial These transactions or arrangements may include instruments denominated in currencies, other than the transactions or arrangements with or involving functional currency of the Fund, will fluctuate due to subsidiaries and affiliates of Bank of Montreal, BMO changes in foreign exchange rates. Investments in Investments Inc., BMO Nesbitt Burns Inc., BMO Asset foreign markets are exposed to currency risk as the Management Corp., BMO Private Investment prices denominated in foreign currencies are converted Counsel Inc., BMO Asset Management Inc., BMO to the Fund’s functional currency in determining fair InvestorLine Inc., Pyrford International Limited, LGM value. The Fund may enter into forward currency Investments Limited, BMO Trust Company, BMO Asset contracts for hedging purposes to reduce foreign Management Limited, BMO Global Asset Management currency exposure or to establish exposure to foreign (Asia) Limited, Taplin, Canida & Habacht LLC, BMO currencies. IFRS 7 considers the foreign exchange Capital Markets Corp., or other investment funds exposure relating to non-monetary assets and liabilities offered by Bank of Montreal, and may involve the to be a component of market price risk not foreign purchase or sale of portfolio securities through or from currency risk. However, the Manager monitors the subsidiaries or affiliates of Bank of Montreal, the exposure on all foreign currency denominated assets purchase or sale of securities issued or guaranteed by and liabilities. The Fund’s exposure to currency risk, if any, is further disclosed in Note 8. BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 (b) Interest rate risk are traded in active markets and can be readily Interest rate risk is the risk that the fair value of the disposed. In addition, the Fund retains sufficient cash Fund's interest bearing investments will fluctuate due positions to maintain liquidity. The Fund may, from to changes in market interest rates. The Fund's time to time, enter into over-the-counter derivative exposure to interest rate risk is concentrated in its contracts or invest in unlisted securities, which are not investment in debt securities (such as bonds, money traded in an organized market and may be illiquid. market investments, short-term investments and Securities for which a market quotation could not be debentures) and interest rate derivative instruments, if obtained and may be illiquid are identified in the any. Other assets and liabilities are short-term in nature Schedule of Investment Portfolio. The proportion of and/or non-interest bearing. The Fund's exposure to illiquid securities to the NAV of the Fund is monitored interest rate risk, if any, is further discussed in Note 8. by the Manager to ensure it does not exceed the regulatory limit and does not significantly affect the (c) Other market risk liquidity required to meet the Fund's financial Other market risk is the risk that the fair value of a obligations. financial instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in a market. Other assets and liabilities are monetary items that are short-term in nature, as such they are not subject to other market risk. The Fund's exposure to other market risk, if any, is further discussed in Note 8. (d) Credit risk Credit risk is the risk that a loss could arise from a security issuer or counterparty to a financial instrument not being able to meet its financial obligations. The fair value of debt securities includes consideration of the credit worthiness of the debt issuer. Credit risk exposure for over-the-counter derivative instruments is based on the Fund's unrealized gain of the contractual obligations with the counterparty as at the reporting date. The credit exposure of other assets is represented by its carrying amount. The Fund's exposure to credit risk, if any, is further discussed in Note 8. The Fund may enter into securities lending transactions with approved counterparties. Credit risk associated with these transactions is considered minimal as all counterparties have a sufficient approved credit rating and the market value of collateral held by the Fund must be at least 102% of the fair value of securities loaned, as disclosed in Note 8, where applicable. (e) Liquidity risk The Fund's exposure to liquidity risk is concentrated in the daily cash redemptions of units, and other liabilities. The Fund primarily invests in securities that BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 8. Fund specific information For the periods ended Mar. 31, Mar. 31, (a) Fund and Series information and change in units (in thousands of units) 2021 2020 The Fund is authorized to issue an unlimited number of Series A Units units in each of Series A Units, Advisor Series Units, Units issued and outstanding, Series F Units, Series D Units and Series I Units, which beginning of period 2,125 2,922 are redeemable at the unitholders’ option. Issued 416 367

Series Inception Date Redeemed during the period (266) (1,045) Series A Units October 22, 1996 Units issued and outstanding, Advisor Series Units October 24, 2008 end of period 2,275 2,244 Series F Units June 21, 2013 Advisor Series Units Series D Units November 20, 2017 Units issued and outstanding, Series I Units January 11, 2011 beginning of period 215 233 Series A Units are offered on a no-load basis and are Issued 21 32 available to all investors. Redeemed during the period (22) (53) Advisor Series Units are available to all investors Units issued and outstanding, through registered dealers. end of period 214 212

Series F Units are available for purchase by investors Series F Units who are enrolled in dealer-sponsored wrap programs Units issued and outstanding, or flat fee accounts. Instead of paying a commission on beginning of period 243 293 each transaction, these investors pay an annual fee to the Manager based on the value of their assets. Issued 57 66 Redeemed during the period (59) (113) Series D Units are available to investors who have an Units issued and outstanding, account with a discount brokerage. A reduced trailing end of period 241 246 commission is paid to discount brokerages in respect to Series D Units which means a lower management fee Series D Units can be charged. Units issued and outstanding, Series I Units are available only to institutional beginning of period 918 187 investors and other investment funds as determined by Issued 93 1,103 the Manager from time to time and on a case-by-case Redeemed during the period (93) (292) basis, and who have entered into an agreement with the Manager. No management fees and fixed Units issued and outstanding, administration fees are charged to the Fund in respect end of period 918 998 of the Series I Units as each investor or dealer Series I Units negotiates a separate fee with the Manager. Units issued and outstanding, The number of units of each series that have been beginning of period 322 204 issued and are outstanding are disclosed in the table Issued 234 145 below. Units issued and outstanding, end of period 556 349

(b) Reconciliation of NAV to Net Assets As at March 31, 2021 and September 30, 2020, there were no differences between the Fund’s NAV per unit and its Net Assets per unit calculated in accordance with IFRS. BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 (c) Increase (decrease) in net assets attributable to holders (d) Income taxes of redeemable units per unit As at the tax year-ended December 15, 2020, the Fund The increase (decrease) in net assets attributable to had the following capital and non-capital losses holders of redeemable units per unit is calculated as available for income tax purposes: follows: Non-Capital Losses

Mar. 31, Mar. 31, That Expire in For the periods ended 2021 2020 Total Total 2034 Capital Non-Capital and Series A Units Losses Losses 2032 2033 thereafter Decrease in net assets attributable to holders ($) ($) ($) ($) ($) of redeemable units (16,908) (5,667) Weighted average units outstanding during 45,039 5,912 2,008 771 3,132 the period (in thousands of units) 2,212 2,428 (e) Related party transactions Decrease in net assets attributable to holders Management fees and administration fees of redeemable units per unit (7.64) (2.33) The Manager is entitled to receive the following fees Advisor Series Units payable monthly, calculated at the following maximum Decrease in net assets attributable to holders annual rates: of redeemable units (2,002) (651) Management Fixed Weighted average units outstanding during Fees Administration the period (in thousands of units) 217 214 Series (%) Fees (%) Decrease in net assets attributable to holders Series A Units 2.000 0.180 of redeemable units per unit (9.24) (3.05) Advisor Series Units 2.000 0.180 Series F Units Series F Units 0.850 0.180 Decrease in net assets attributable to holders Series D Units 1.250 0.180 of redeemable units (1,371) (454) Series I Units * * Weighted average units outstanding during * Negotiated and paid by each Series I investor directly to the Manager. the period (in thousands of units) 224 283 Decrease in net assets attributable to holders The outstanding accrued management fees due to the of redeemable units per unit (6.13) (1.61) Manager are included in “Accrued expenses” in the Statement of Financial Position and as at March 31, Series D Units 2021 amounted to $131 (September 30, 2020 — $13). Decrease in net assets attributable to holders of redeemable units (4,065) (1,478) The outstanding accrued fixed administration fees due Weighted average units outstanding during to the Manager are included in “Accrued expenses” in the period (in thousands of units) 923 966 the Statement of Financial Position and as at March 31, 2021 amounted to $13 (September 30, 2020 — $1). Decrease in net assets attributable to holders of redeemable units per unit (4.40) (1.53) Expenses Series I Units The Manager pays the administration and operating expenses of the Series I Units. Decrease in net assets attributable to holders of redeemable units (1,121) (287) Brokerage commissions and soft dollars Weighted average units outstanding during Brokerage commissions paid (excluding transaction the period (in thousands of units) 419 263 costs) on security transactions and amounts paid to Decrease in net assets attributable to holders related parties of the Manager for brokerage services of redeemable units per unit (2.68) (1.09) provided to the Fund for the periods are as follows:

BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 Mar. 31, 2021 Mar. 31, 2020 As at Mar. 31, 2021 For the periods ended ($) ($) Cash and Invest- Total brokerage amounts paid 19 46 other ments Total brokerage amounts paid to current (monetary & Forward Net As a % related parties 1 — receivables non- currency currency of Net & payables monetary) contracts exposure Assets There were no ascertainable soft dollars paid or Currencies ($) ($) ($) ($) (%) payable to dealers by the Fund during the periods. Pound Units held by the Manager Sterling — 527 — 527 0.6 The Manager held the following units of the Fund: U.S. Dollar 214 13,145 — 13,359 16.1

As at Mar. 31, 2021 Total 230 21,056 — 21,286 25.6 Number of Value of Series Units Units ($) As at Sep. 30, 2020 Cash and Invest- Series I Units 23 0 other ments current (monetary & Forward Net As a % As at Sep. 30, 2020 receivables non- currency currency of Net Number of Value of & payables monetary) contracts exposure Assets Series Units Units ($) Currencies ($) ($) ($) ($) (%) Series I Units 23 0 Australian (f) Financial instruments risks Dollar 44 7,520 — 7,564 7.4 The Fund’s objective is to increase the value of Pound investments over the long term by investing primarily Sterling — 2,333 — 2,333 2.3 in the securities of Canadian companies operating in U.S. Dollar 113 14,265 — 14,378 14.1 the precious metals industry, including exploration, Total 157 24,118 — 24,275 23.8 mining, production or distribution. As at March 31, 2021 and September 30, 2020, if the No changes affecting the overall level of risk of Canadian dollar had strengthened or weakened by 5% investing in the Fund were made during the period. in relation to all foreign currencies, with all other Currency risk variables held constant, the Net Assets of the Fund The Fund’s exposure to currency risk is summarized in could possibly have decreased or increased, the tables below. Amounts shown are based on the respectively, by approximately $1,064 (September 30, carrying value of monetary and non-monetary assets 2020 — $1,214). In practice, actual results may differ (including derivatives and the underlying principal from this sensitivity analysis and the difference could (notional) amount of forward currency contracts, if be material. any). Interest rate risk

As at Mar. 31, 2021 As at March 31, 2021 and September 30, 2020, the Fund did not have significant exposure to interest rate risk. Cash and Invest- other ments Other market risk current (monetary & Forward Net As a % The Fund has a significant exposure to other market receivables non- currency currency of Net risk arising from its investment in equity securities. & payables monetary) contracts exposure Assets Using historical correlation between the Fund's return Currencies ($) ($) ($) ($) (%) and the return of its benchmark, if the benchmark, Gold Australian GICS Sub Industry of S&P/TSX Composite Total Return Dollar 16 7,384 — 7,400 8.9 Index, had increased or decreased by 10%, with all other variables held constant, the Net Assets of the Fund would have increased or decreased, respectively, BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 by $7,285 (September 30, 2020 — $9,565). Historical Mar. 31, Sep. 30, correlation may not be representative of future As at 2021 2020 correlation, and accordingly, actual results may differ and the difference could be material. Equities Australia 8.9% 7.5% Credit risk Brazil —% 1.3% As at March 31, 2021 and September 30, 2020, the Fund Canada 72.3% 62.5% did not have significant exposure to credit risk. Cote D'ivoire —% 2.1% Securities lending Egypt 0.6% 2.0% The Fund had assets involved in securities lending Nicaragua —% 8.8% transactions outstanding as at March 31, 2021 and Peru —% 0.3% September 30, 2020 as follows: South Africa 4.9% 4.7% United States 11.0% 9.3% Aggregate Value of Aggregate Value of Collateral Securities on Loan Received for the Loan Other Assets Less Liabilities 2.3% 0.9% ($) ($) 100.0% 100.0% Mar. 31, 2021 1,084 1,171 (g) Fair value hierarchy Sep. 30, 2020 1,015 1,100 The Fund classifies its financial instruments into three The table below is a reconciliation of the gross amount levels based on the inputs used to value the financial generated from securities lending transactions to the instruments. Level 1 securities are valued based on security lending revenue for the periods ended quoted prices in active markets for identical securities. March 31, 2021 and March 31, 2020: Level 2 securities are valued based on significant observable market inputs, such as quoted prices from For the periods ended Mar. 31, 2021 Mar. 31, 2020 similar securities and quoted prices in inactive markets % of Gross % of Gross or based on observable inputs to models. Level 3 Securities Securities securities are valued based on significant unobservable Lending Lending inputs that reflect the Manager's determination of Amount Revenue Amount Revenue assumptions that market participants might reasonably use in valuing the securities. The tables below show the Gross securities lending relevant disclosure. revenue 12 100.0 5 100.0

Withholding taxes — — — — As at Mar. 31, 2021 Financial assets Level 1 Level 2 Level 3 Total 12 100.0 5 100.0 Payment to securities Equity Securities 69,014 11,943 — 80,957 lending agents 3 24.9 1 24.9

Net securities lending As at Sep. 30, 2020 revenue 9 75.1 4 75.1 Financial assets Level 1 Level 2 Level 3 Total Debt Securities — 600 — 600 Concentration risk Equity Securities 85,658 14,646 — 100,304 The Fund's concentration risk is summarized in the following table: Total 85,658 15,246 — 100,904

Mar. 31, Sep. 30, Transfers between levels As at 2021 2020 Transfers are made between the various fair value Money Market Investments hierarchy levels due to changes in the availability of Federal —% 0.6% quoted market prices or observable inputs due to changing market conditions. BMO Precious Metals Fund (unaudited)

NOTES TO THE FINANCIAL STATEMENTS (cont'd) (All amounts in thousands of Canadian dollars, except per unit data) March 31, 2021 During the period from October 1, 2020 to March 31, Asset Management Corp. or Taplin, Canida and 2021, there were no transfers between the levels. Habacht (together, “BMO GAM U.S.”), subject to client consent. An evaluation is currently underway between During the period from October 1, 2019 to BMO GAM U.S. and CTI in relation to the Fund’s September 30, 2020, the valuation of certain equity sub-advisory arrangements with BMO GAM U.S. securities traded outside of North America were changed from being valued using close prices to being fair valued by factoring in the impact of significant events occurring after the close of the relevant market. As a result of this change, $3,084 of equity securities were transferred from Level 1 to Level 2.

9. Significant event The current spread of the novel coronavirus (COVID-19) has caused a global pandemic and the unprecedented responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged social distancing or similar restrictions, as well as the forced or voluntary closure of, or operational changes to many retail and other businesses, has resulted in fundamental changes in the business world with significant impacts on operations and world markets. The impacts on operations includes changes in work environments, inherent controls risk and cyber-risks; while the main impacts on investments includes increase in market risks, market volatility and liquidity risk, with its impacts on valuations. Management has implemented and will continue to review the situation with a view to implementing, additional controls and procedures to adequately address the risks and reduce the impacts of COVID-19 on the Fund, to the extent possible.

10. Subsequent event On April 12, 2021, BMO Financial Group announced that it had reached a definitive agreement to sell the entities that represent its EMEA Asset Management business to Ameriprise Financial, Inc. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory approval and other customary closing conditions. After the transaction has closed, Pyrford International Limited, LGM Investments Limited, BMO Global Asset Management (Asia) Limited and BMO Asset Management Limited will no longer be subsidiaries or affiliates of Bank of Montreal or related or connected to the Manager. Separately, in the U.S. the transaction includes the transfer to Columbia Threadneedle Investments (“CTI”), Ameriprise Financial’s global asset management business, of certain asset management clients of BMO BMO Investments Inc. Independent Auditor First Canadian Place, 43rd Floor PricewaterhouseCoopers LLP 100 King Street West PwC Tower Toronto, Ontario M5X 1A1 18 York Street, Suite 2600 Toronto, Ontario M5J 0B2 www.bmo.com/mutualfunds and www.bmo.com/gam/ca

If you have any questions, please give us a call as follows: • If you purchased BMO Mutual Funds through a BMO Bank of Montreal branch or BMO Online Banking, please call 1-800-665-7700. • If you purchased BMO Mutual Funds through a full-service or discount broker, please call 1-800-668-7327 or email [email protected].

BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal. ®/™ Registered trade-marks/trade-mark of Bank of Montreal, used under licence.