BMO Moves to Redeem MicroSectors™ FANG+™ Index ETNs and Launches New Investment Option

BMO Announces Redemption of MicroSectors™ FANG+™ ETNs

Overview
The Bank of Montreal (BMO) has made a significant move by exercising its call right to redeem all outstanding securities linked to the MicroSectors™ FANG+™ Index 3× Leveraged ETNs, also known by ticker FNGA. This redemption will take effect from May 1, 2025, marking a pivotal moment for investors involved with these Exchange Traded Notes (ETNs).

Details of the Redemption
BMO issued a call notice to all holders of the FNGA ETNs as of May 1, 2025. The Call Measurement Period is slated to begin on May 2, 2025. During this five-day period, which will conclude on May 8, 2025, the bank will determine the Call Settlement Amount for each note. The calculated amount will be based on the arithmetic mean of the closing Indicative Note Values observed during these business days. Upon completion of this process, the Call Settlement Date is expected to be May 15, 2025.

This move signifies BMO's intention to stabilize its exposure in this market segment, allowing investors to redeem their holdings in a timely manner. The FNGA ETNs, launched as leveraged products designed to afford active traders exposure to the performance of high-growth tech stocks, will also be delisted from the NYSE before trading opens on the settlement date.

Future Offerings: FNGB ETNs
In conjunction with the FNGA ETNs' redemption, BMO is reminding investors about the availability of a replacement product, the MicroSectors™ FANG+™ 3× Leveraged ETNs, which are branded as FNGB. These newly launched ETNs, which began trading on February 20, 2025, offer a fresh entry point for investors seeking leveraged exposure to the same index while better reflecting the current market dynamics.

The FNGB ETNs are designed to deliver three times leveraging on a daily basis, subject to associated fees and charges. Notably, the Daily Investor Fee for FNGB will experience a temporary discount of 0.35% per annum until August 19, 2025, after which it will normalize to a rate of 0.95% per annum. With the aim to facilitate effective trading opportunities, FNGB provides an avenue for investors to maintain leveraged exposure to the FANG+ Index, comprising key tech and consumer discretionary industries.

Investment Implications
The transition from FNGA to FNGB indicates an evolving strategy from BMO in managing leveraged investment products. Investors in the FNGA ETNs are advised to consider their options carefully, especially in light of potential losses if sold before the redemption takes place. The introduction of FNGB allows for continued participation in market trends while also addressing the need for a risk-aware investment approach.

With the high volatility associated with leveraged products, it is critical for investors to monitor the performance actively and adjust their strategies accordingly. BMO's approach underscores its commitment to offering products that align with the dynamic nature of the financial markets while catering to a sophisticated investor base.

Conclusion
As BMO navigates these transitions in its ETN offerings, investors should stay informed about the mechanics of each product, the nature of their investments, and the associated risks. The bank remains a key player in providing innovative financial solutions that cater to evolving market demands.
For further information on the MicroSectors™ ETNs, stakeholders are encouraged to consult the relevant ETN Prospectus available through BMO's designated channels.