Canada’s BMO sold about $275mn worth of Microsoft shares

By Ashika Rajan, Trainee Reporter
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According to sources, a responsible investment arm of Canada’s Bank of Montreal (BMO) sold approximately $275 million worth of American tech giant Microsoft shares due to the company’s recent US Army contract for augmented reality headsets.

As per the sources, BMO’s responsible investment managers are concerned that Microsoft’s $22 billion Army contract, which was won in March, would transform the technology from a proof-of-concept to a battlefield-ready product, which is beyond the scope of its investment strategies’ mandate.

Mr. Jamie Jenkins, Head of the Responsible Global Equities team at BMO said in a statement that the contract “sits at odds with our central investment philosophy to avoid companies with damaging business practices, and we class bespoke military equipment as one component of our avoid criteria.”

A request for comment from Microsoft was not immediately responded to.

Many conventional socially based investment funds exclude the ownership of defense contractors or companies engaged in activities such as alcohol or gambling. The step by BMO demonstrates how such restrictions will apply to technology companies doing business with government agencies.

Due to civil rights issues, the eCommerce giant Amazon extended a moratorium on police use of its facial recognition software indefinitely.

Microsoft has been working with the Army on the prototyping phase of the Integrated Visual Augmentation System (IVAS), for the past two years. The project is driven by Microsoft’s HoloLens and Azure cloud computing services. The Army had entered the development process of the project, the company announced in March.

According to reports, the BMO will continue to own Microsoft in conventional investment strategies that are not related to social-investing strategies.

The report added that the sale of BMO’s European asset management business to Ameriprise Financial Inc for $1.1 billion is on track to close in the fourth quarter.

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