BMO Announces Notional Distributions and Tax Adjustments for Certain Exchange-Traded Funds
BMO Announces Notional Distributions and Tax Adjustments for Certain Exchange-Traded Funds |
[19-April-2024] |
TORONTO, April 19, 2024 /CNW/ - BMO Asset Management Inc. ("BMOAM Inc."), the manager of the BMO ETFs, today announced notional non-cash reinvested distributions (each a "Notional Distribution") and tax adjustments for certain BMO ETFs. A Notional Distribution occurs when a BMO ETF makes a distribution in the form of units, which are then immediately consolidated with the units issued and outstanding held prior to the distribution, so that the total number of units held after the distribution is identical to the number of units held prior to the distribution. Each BMO ETF listed in the following table made a Notional Distribution, expressed in the table as a dollar amount per unit, to all unitholders of record on the relevant Record Date:
BMOAM Inc. will update the tax characteristics of the 2023 distributions of each of these BMO ETFs, as well as the 2023 distributions of BMO US Equity Buffer Hedged to CAD ETF - October (Cboe Canada: ZOCT), which will be reported to brokers via the Canadian Depository for Securities. Each of these BMO ETFs was launched in 2023. These tax adjustments occurred because none of these BMO ETFs has qualified as a 'mutual fund trust' under the Income Tax Act (Canada) (the "Tax Act"), and each has been a 'financial institution' as defined under the Tax Act for at least a portion of its existence:
Generally, a BMO ETF is a 'financial institution' at any time that it does not qualify as a 'mutual fund trust' if more than 50% of its units are held by one or more 'financial institutions'. Each BMO ETF that became or ceased to be a "financial institution" experienced, on that date, a deemed year end for tax purposes, and was required to distribute taxable income, if any, as of the deemed year end. Further information about BMO ETFs can be found at bmoetfs.comhttps://www.bmoetfs.ca/ About BMO Exchange Traded Funds (ETFs) 1Morningstar, December 2023 About BMO Financial Group Disclaimers: For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETF's prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination. BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal. Distributions of net income and net taxable gains of a BMO ETF will be included in the unitholder's income for tax purposes in the year they are paid, whether or not such amounts are reinvested in additional units. A unitholder's adjusted cost base will be reduced by the amount of any returns of capital. If a unitholder's adjusted cost base goes below zero, such unitholder will have to pay capital gains tax on the amount below zero. Please refer to the summary of the principal income tax considerations set out in the prospectus for the relevant BMO ETF. Investors should also consult their own tax advisors about their individual circumstances. ®/™Registered trademarks/trademark of Bank of Montreal, used under licence. SOURCE BMO Financial Group | ||||||||||||||||||||||
Company Codes: NEO:ZEBA, NEO:ZUEA, Toronto:ZLSC, Toronto:ZLSU |