#USA #New York #BMO Financial #REX Shares #MicroSectors

New Leveraged Exchange-Traded Notes by BMO and REX

In a significant move reflecting their diverse offerings in the investment landscape, Bank of Montreal (BMO) and REX Shares, LLC have introduced two groundbreaking categories of Leveraged and Inverse Leveraged Exchange Traded Notes (ETNs) focusing on the U.S. Big Banks and U.S. Big Oil sectors. These new products will trade on NYSE Arca, starting tomorrow, and are designed specifically for sophisticated investors looking to gain more dynamic exposure to these essential industries.

Product Launch Details

The new ETNs allow investors to engage with these historically powerful sectors on a more leveraged basis, enhancing their potential for both gains and risks. The details of the newly launched ETNs are as follows:

• - MicroSectors™ U.S. Big Banks 3x Leveraged ETNs (Ticker: BNKU): This ETN offers three times leveraged long exposure to the performance of top U.S. banks, linked to the Solactive MicroSectors™ U.S. Big Banks Index.
• - MicroSectors™ U.S. Big Banks -3x Inverse Leveraged ETNs (Ticker: BNKD): This product provides three times leveraged short exposure, allowing investors to profit from declines in the sector.
• - MicroSectors™ U.S. Big Oil 3x Leveraged ETNs (Ticker: NRGU): Similar to the banking sector, this ETN enables three times leveraged long exposure but for U.S. oil companies, linked to the Solactive MicroSectors™ U.S. Big Oil Index.
• - MicroSectors™ U.S. Big Oil -3x Inverse Leveraged ETNs (Ticker: NRGD): This offers the ability to take a leveraged short position in the oil market, presenting another opportunity for investors to act on market movements.

Index Linkage and Strategy

Each index associated with these ETNs is equally-weighted, aimed at monitoring the performance of the ten largest U.S. stocks within their respective sectors based on market capitalization. This structure is supported by comprehensive metrics and indexes created by Solactive AG, a recognized leader in index licensing. Importantly, these ETNs are not intended for long-term holding; instead, they serve as tools for daily trading and should be managed with care, considering the inherent risks of leverage and volatility.

Although geared towards those familiar with high-risk investment strategies, potential investors are strongly encouraged to perform due diligence and consult with financial advisors to understand the complexities involved before diving into these products. The nuances of daily investment decisions, as well as the significant risks associated with leveraged and inverse investments, need to be fully appreciated.

Financial Considerations

For the first six months post-launch, BMO will offer a discount on daily investor fees at a rate of 0.35% per annum, making it an attractive period for initial investment. Afterward, the fees will revert to the standard rate of 0.95% per annum. It’s crucial to acknowledge that the returns derived from these ETNs may not align directly with three times the return of a direct investment in the respective indices over different periods due to the dynamic nature of leverage.

Conclusion

The launch of these new ETNs by BMO and REX emphasizes a strategic move towards more innovative investment products that cater to the evolving needs of investors. With a robust background and expertise in financial services, both companies continue to enhance their product offerings, supporting investors on their financial journeys in volatile markets. For more information about these new offerings, investors are advised to visit BO Financial or MicroSectors' website.

Exploring these leveraged investments could open new doors for financial growth and risk management for savvy investors who stay informed and engaged in today's fast-paced market environment.