Semi-Annual Management Report of Fund Performance BMO Private Canadian Income Equity Portfolio For the period ended June 30, 2021

This semi-annual management report of fund performance contains financial highlights, but does not contain the semi-annual or annual financial statements of the Portfolio. If the semi-annual or annual financial statements of the Portfolio do not accompany the mailing of this report, you may obtain a copy of the semi-annual or annual financial statements at your request, and at no cost, by calling 1-855-852-1026, by e-mailing us at [email protected], by writing to us at BMO Private Investment Counsel Inc., 1 First Canadian Place, 100 King St. W., 41st Floor, , , M5X 1A1 or by visiting our website at www.bmo.com/privatebanking or SEDAR at www.sedar.com. You may also contact us using one of these methods to request a copy of the Portfolio’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record and/or quarterly portfolio disclosure.

Management Discussion Financials, Energy, Consumer Staples, Consumer of Fund Performance Discretionary, Utilities and Industrials sectors also detracted from performance. Individual detractors from BMO Private Investment Counsel Inc. (“BPIC” or the performance included Financial Corp., which “Manager”), the manager and portfolio manager, is weakened in response to falling interest rates and responsible for the management of the overall business, relatively weak earnings results. Algonquin Power & investments and operations of the BMO Private Portfolios Utilities Corp. detracted from performance in response and has engaged BMO Asset Management Inc. to negative sentiment around the renewable energy (“BMO AM Inc.” or the “sub-advisor”) as the sub-advisor industry that resulted in a sharp increase in oil pricing. of BMO Private Canadian Income Equity Portfolio Canadian National Railway Co.’s shares came under (the “Portfolio”). pressure as a rival bid for Kansas City Southern Industries Inc. led to concern about the company’s Results of Operations valuation and leverage. Over the six-month period ended June 30, 2021, the Portfolio returned 14.52%, after expenses. The During the period, the Portfolio’s underweight positions Portfolio’s benchmark is the S&P/TSX Composite in the Materials and Information Technology sectors Dividend Index, which generated a 17.18% total return contributed to performance, as did its overweight over the same six-month period. positions in the Financials and Real Estate sectors. The Portfolio’s stock selection in the Materials, Communication Canadian equities, as represented by the S&P/TSX Services and Real Estate sectors also contributed to Composite Index, posted a relatively strong gain over performance. Individual contributors to performance the first half of 2021, with this performance driven by included CCL Industries Inc., which benefited from optimism about the COVID-19 vaccine rollout, as well improvements in the operating and financial positions as continued financial support from the Canadian of its business units alongside the global economic government and the Bank of . Energy and recovery. WSP Global Inc. benefited from growing Financials were among the top-performing sectors in the investor confidence in the company’s outlook and its Canadian equity market. Energy stocks benefited from significant exposure to the transit, building and rising oil prices as investors expected strong travel-related environmental sub-sectors that have been widely household spending and, therefore, higher demand for oil. expected to benefit from an improving global economy. Brookfield Infrastructure Partners L.P. contributed to the The Portfolio’s underweight position in the Energy Portfolio’s performance, as the company generated sector detracted from performance, as did its overweight strong operating results, made progress on some growth positions in the Utilities, Industrials and Consumer initiatives and benefited from lower interest rates. Staples sectors. The Portfolio’s stock selection in the BMO Private Canadian Income Equity Portfolio

A position added to the Portfolio during the period was The sub-advisor’s strategy remains focused on Tricon Residential Inc., an asset management company investing in high-quality, sustainable businesses that that invests in North American residential real estate. have strong competitive advantages, produce attractive The sub-advisor believes the company has a high-quality returns on capital, and demonstrate smart capital business, a management team with a successful track allocation to provide the best offense and defense record of capital allocation and value creation, and the throughout the business cycle. Companies with these potential for above-average cash flow growth as a result attributes tend to have flexible business models and of its expansion strategy. corporate strategies that should allow them to create value for stakeholders. The Portfolio’s positions in Company and Element Fleet Management Corp. were increased during the period. Canadian Pacific Railway Related Party Transactions Company was increased in response to the company’s BMO Trust Company, an indirect, wholly-owned strong business model, its leverage to an improving subsidiary of (“BMO”), is the trustee North American economy and the potential for strong (the “trustee”) and BPIC is the manager of the Portfolio. value creation. Element Fleet Management Corp. From time to time, BPIC may, on behalf of the Portfolio, provides fleet management services to an array of enter into transactions or arrangements with or established companies. Element Fleet Management involving other members of BMO Financial Group, or Corp. has enjoyed a dominant market position in an certain other persons or companies that are related or industry with high barriers to entry, a stable and connected to the Portfolio (each, a “related party” and recurring revenue base, and the sub-advisor believes the collectively, the “related parties”). The purpose of this company should be able to grow its free cash flow and section is to provide a brief description of any transaction capital returns. involving the Portfolio and a related party. In each instance where a conflict of interest is identified, it The Portfolio’s position in Alimentation Couche-Tard will be referred to the Portfolio’s independent review Inc. was reduced following an extended period of price committee (the “IRC”). The primary focus of the IRC appreciation. Brookfield Property Partners L.P. was sold is to determine whether the proposed action of the following a takeover announcement, as well as in Manager in respect of the conflict of interest matter response to the sub-advisor’s belief that retail real estate achieves a fair and reasonable result for the Portfolio. will remain challenged for some time. The IRC has reviewed the related party relationships described below and has provided a positive For information on the Portfolio’s longer-term recommendation that each relationship achieves a performance and composition, please refer to the Past fair and reasonable result for the Portfolio. Performance section and Summary of Investment Portfolio section of this report. Sub-advisor BPIC has hired BMO AM Inc., a related party, to Recent Developments provide investment advice and make investment While the pandemic continues to pose risks to financial decisions for the Portfolio’s investment portfolio. markets, BMO AM Inc. remains optimistic about North BMO AM Inc. receives a sub-advisory fee based on American equity markets over the long term in assets under management, which is paid monthly. response to the effective distribution of vaccines, the BMO AM Inc. is paid by BPIC. rebound in hiring and earnings trends, the strength of pent-up consumer demand and continued government stimulus measures. While the sub-advisor remains optimistic about equities, the stock market is expected to remain highly sensitive to any perceived risks related to the recovery, inflation, and/or government and central bank policy direction. BMO Private Canadian Income Equity Portfolio

Buying and Selling Securities Brokerage Commissions During the period, the Manager relied on Standing The Portfolio pays standard brokerage commissions at Instructions provided by the Portfolio’s IRC for any of market rates to BMO Nesbitt Burns Inc., an affiliate of the following related party transactions that may have the Manager, for executing a portion of its trades. The occurred in the Portfolio: brokerage commissions charged to the Portfolio during the periods were as follows: (a) investments in securities of BMO, an affiliate of the Period ended Period ended Manager; June 30, 2021 June 30, 2020 ($000s) ($000s) (b) investments in a class of equity securities and/or Total Brokerage Commissions 223 193 non-government debt securities of an issuer during the distribution period of those securities and/or Brokerage Commissions paid to the 60-day period following the completion of the BMO Nesbitt Burns Inc. 26 29 distribution period, where BMO Nesbitt Burns Inc., an affiliate of the Manager, or any other affiliate of the Manager acted as an underwriter in the Wealth Management Fee distribution of those securities; Units of the Portfolio are only available through the wealth management service offered by BMO Financial (c) trades in over-the-counter debt securities in the Group. The trustee, a related party, and the Manager secondary market with BMO Nesbitt Burns Inc., or receive an annual fee from each investor for the wealth any other affiliate of the Manager, acting as principal management service offered by BMO Financial Group. in the Canadian debt securities market; and A tiered schedule is applied to calculate the annual fee (d) inter-fund trades for this service. The fee schedule starts at 1.95% and declines to 0.20% (depending on the nature and size of (each, a “Related Party Transaction”). the investor’s investment portfolio), and is calculated as a percentage of the assets under management. The In accordance with the IRC’s Standing Instructions, in actual wealth management fee payable by each making a decision to cause the Portfolio to make a investor is set out in BPIC’s Investment Management Related Party Transaction, the Manager and the sub- Fee Schedule that is provided to the investor when the advisor of the Portfolio are required to comply with the investor enters into an investment management Manager’s written policies and procedures governing agreement with the trustee and BPIC. The wealth the Related Party Transaction and report periodically management fee is paid directly by the investor to the to the IRC, describing each instance that the Manager trustee and the Manager. The trustee may compensate and/or the sub-advisor relied on the Standing financial institutions and securities registrants within Instructions and their compliance or non-compliance BMO Financial Group for client referrals to the wealth with the governing policies and procedures. The management service. governing policies and procedures are designed to ensure that each Related Party Transaction (i) is made free from any influence of BMO, BMO Nesbitt Burns Inc. or an associate or affiliate of BMO and/or BMO Nesbitt Burns Inc. and without taking into account any considerations relevant to BMO, BMO Nesbitt Burns Inc. or an associate or affiliate of BMO and/or BMO Nesbitt Burns Inc., (ii) represents the business judgment of the Manager and/or the subadvisor, uninfluenced by considerations other than the best interests of the Portfolio, and (iii) achieves a fair and reasonable result for the Portfolio. BMO Private Canadian Income Equity Portfolio

Unitholder Services The Portfolio is provided with certain facilities and services by related parties. BPIC is the registrar of the Portfolio. The trustee and BPIC are paid by the Portfolio for fees relating to the custodial and administrative services they provide, respectively. Administrative services include fund accounting, record keeping and purchases/redemption order processing.

The fees charged to the Portfolio during the periods were as follows: Period ended Period ended June 30, 2021 June 30, 2020 ($000s) ($000s) Unitholder Services 103 104

Management Fee There is no management fee charged to the Portfolio. The trustee and the Manager receive an annual wealth management fee from investors for the wealth management service offered by BMO Financial Group. BMO Private Canadian Income Equity Portfolio

Financial Highlights The following tables show selected key financial information about the Portfolio and are intended to help you understand the Portfolio’s financial performance for the periods indicated.

Six months ended Years ended December 31 The Portfolio’s Net Assets Per Unit (1) June 30, 2021 2020 2019 2018 2017 2016 Net assets, beginning of period $ 10.02 10.37 8.71 9.88 9.18 7.73 Increase (decrease) from operations: Total revenue $ 0.15 0.30 0.29 0.29 0.27 0.27 Total expenses (2) $ (0.00) (0.00) (0.00) (0.01) (0.01) (0.00) Realized gains (losses) for the period $ 0.04 (0.31) 0.08 0.29 0.12 0.02 Unrealized gains (losses) for the period $ 1.26 0.04 1.57 (1.45) 0.59 1.42 Total increase (decrease) from operations (3) $ 1.45 0.03 1.94 (0.88) 0.97 1.71 Distributions: From income (excluding dividends) $ — — — — 0.01 — From dividends $ 0.14 0.30 0.29 0.29 0.25 0.27 From capital gains $ — — — — — — Return of capital $ — 0.00 0.00 0.00 0.00 0.00 Total Annual Distributions (4) $ 0.14 0.30 0.29 0.29 0.26 0.27 Net assets, end of period $ 11.33 10.02 10.37 8.71 9.88 9.18 (1) This information is derived from the Portfolio’s unaudited and audited financial statements. (2) Includes commissions and other portfolio transaction costs and withholding taxes. (3) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. (4) Distributions were paid in cash or reinvested in additional units of the Portfolio, or both.

Six months ended Years ended December 31 Ratios and Supplemental Data June 30, 2021 2020 2019 2018 2017 2016 Total net asset value (000s) (1) $ 2,804,898 2,413,094 2,271,621 1,833,353 2,263,548 1,912,373 Number of units outstanding (000s) (1) 247,564 240,751 219,037 210,462 229,098 208,325 Management expense ratio (2) % 0.02 0.02 0.02 0.02 0.02 0.03 Management expense ratio before waivers or management absorptions (2) % 0.13 0.13 0.13 0.14 0.13 0.14 Trading expense ratio (3) % 0.02 0.02 0.01 0.02 0.05 0.01 Portfolio turnover rate (4) % 1.99 6.11 7.72 13.59 21.30 1.95 Net asset value per unit $ 11.33 10.02 10.37 8.71 9.88 9.18 (1) This information is provided as at June 30 or December 31 of the period shown, as applicable. (2) Management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period. (3) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. (4) The portfolio turnover rate indicates how actively the Portfolio’s sub-advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Portfolio buying and selling all of the securities in its portfolio once in the course of the year. The higher a portfolio turnover rate in a year, the greater the trading costs payable by the portfolio 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 portfolio. BMO Private Canadian Income Equity Portfolio

Past Performance General The Portfolio’s performance information assumes that all distributions made by the Portfolio in the periods shown were reinvested in additional units of the Portfolio and is based on the net asset value of the Portfolio.

The performance information does not take into account sales, redemption, distribution or other optional charges that, if applicable, would have reduced returns or performance. Please remember, how the Portfolio has performed in the past does not necessarily indicate how it will perform in the future.

Year-by-Year Returns The following bar chart shows the performance for each of the financial years and for the six-month period ended June 30, 2021 shown and illustrates how the performance has changed from year to year. The bar chart shows in percentage terms how an investment made on the first day of each financial year would have increased or decreased by the last day of each financial year. 30% 22.51 22.50 20% 18.08 13.46 14.52 10.60 10% 9.03

0% -0.42 -0.21 -3.95 -10% -9.10

-20%

-30% 2011 2012(1) 2013 2014 2015 2016 2017 2018 2019 2020 2021

(1) On March 26, 2012, BMO AM Inc. became the sub-advisor of the Portfolio. BMO Private Canadian Income Equity Portfolio

Summary of Investment Portfolio as at June 30, 2021 % of Net Top 25 Holdings % of Net Portfolio Allocation Asset Value Issuer Asset Value Financials 40.9 8.8 Industrials 15.1 Toronto-Dominion Bank, The, 8.2 Utilities 9.8 Brookfield Asset Management Inc., Class A 7.8 Energy 8.3 Bank of Nova Scotia, The, 6.3 Materials 7.3 Canadian National Railway Company 5.7 Real Estate 5.0 Brookfield Infrastructure Partners L.P. 4.2 Communication Services 4.5 Inc. 4.1 Consumer Staples 4.3 Waste Connections, Inc. 3.9 Consumer Discretionary 2.8 Manulife Financial Corporation 3.6 Cash/Receivables/Payables 2.0 Inc., Class B 3.4 Total portfolio allocation 100.0 Intact Financial Corporation 3.4 WSP Global Inc. 3.0 Franco-Nevada Corporation 2.9 TC Energy Corporation 2.8 Inc. 2.8 Ltd. 2.3 Alimentation Couche-Tard Inc., Class B 2.1 Cash/Receivables/Payables 2.0 CCL Industries Inc., Class B 2.0 Northland Power Inc. 2.0 Fortis Inc. 1.9 Canadian Apartment Properties REIT 1.8 Algonquin Power & Utilities Corp. 1.8 Element Fleet Management Corp. 1.6 Allied Properties REIT 1.5 Top holdings as a percentage of total net asset value 89.9 Total Net Asset Value $2,804,898,382

The summary of investment portfolio may change due to the Portfolio’s ongoing portfolio transactions. Updates are available quarterly. Manager Trustee BMO Private Investment Counsel Inc. BMO Trust Company 1 First Canadian Place 1 First Canadian Place 100 King Street West, 41st Floor 100 King Street West, 41st Floor Toronto, Ontario M5X 1A1 Toronto, Ontario M5X 1A1

BMO Private Wealth is a brand name for a business group consisting of Bank of Montreal and certain of its affiliates in providing private wealth management products and services. Not all products and services are offered by all legal entities within BMO Private Wealth. Banking services are offered through Bank of Montreal. Investment management, wealth planning, tax planning, and philanthropy planning services are offered through BMO Nesbitt Burns Inc. and BMO Private Investment Counsel Inc. Estate, trust, and custodial services are offered through BMO Trust Company. BMO Private Wealth legal entities do not offer tax advice.

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 assumptions 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 Portfolio may invest and the risks detailed from time to time in the simplified prospectus of the BMO Private Portfolios. We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to investing in the Portfolio, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Due to the potential impact of these factors, BMO Private Investment Counsel 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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