CI Mutual Funds Inc. and Skylon Advisors Inc. today announced the launch of Bank of Montreal CI C.A.P.I.T.A.L. Deposit Notes, Enhanced Yield Class, Series 1.

The notes offer investors 100% principal protection and a leveraging feature designed to maximize the notes’ income potential.

The notes, which are issued by Bank of Montreal, will provide a total return over an 8-year period linked to the performance of the Signature High Income Fund managed by Ben Cheng and Matt Shandro. Recently named the 2004 Canadian Income Trust Fund of the Year, the fund invests in a diverse portfolio of high- yielding securities ranging from income trusts to corporate bonds.

The notes will employ leverage to provide up to 200% exposure to the fund. The degree of leverage will be determined by a dynamic leveraging strategy designed to enhance the participation in the fund’s returns during positive periods and to reduce volatility during lower performance periods.

On a monthly basis, investors in the notes will receive the equivalent of 75% of the underlying fund’s distributions, including distributions paid on leveraged exposure to the fund. Investors also will benefit from reinvestment of the remaining 25% of the underlying fund’s distributions. This includes the amounts paid from the leveraged exposure to the fund. Distributions do not diminish the guarantee on the principal invested.

At the end of the term of the notes, Bank of Montreal will pay investors their principal and interest, if any, linked to the performance of the underlying investment.

The notes are fully eligible for registered plans. Series 1 is available until March 18, 2005. The issue price is $100 per note, with the minimum investment being $2,000.

Earlier this month, CI and Bank of Montreal launched the Bank of Montreal CI C.A.P.I.T.A.L. Deposit Notes, Callable Class, Series 1, which offer investors a return over a five-year period linked to the performance of a portfolio equally divided between CI Canadian Investment Fund and Signature High Income Fund