BMO Raises Financing Spread on MicroSectors™ Gold Miners ETNs to 3.25%

BMO Expands Financing Spread for MicroSectors™ Gold Miners ETNs

On November 14, 2025, Bank of Montreal (BMO) made a significant announcement regarding its MicroSectors™ Gold Miners 3X Leveraged Exchange-Traded Notes (ETNs), specifically those set to mature on June 29, 2040. According to the official release, BMO has decided to increase the financing spread associated with these ETNs, which will take effect on November 21, 2025.

What Does This Mean for Investors?

The adjustment will raise the financing spread from 2.25% to a new level of 3.25%, directly influencing investors holding these ETNs. The financing spread affects the Daily Financing Charge, which is calculated based on the Federal Reserve Bank Prime Loan Rate, plus the aforementioned spread. Therefore, with the increase in the financing spread, investors can expect their daily costs to rise, which in turn will negatively impact their overall return on investment.

Implications of Increased Charges

Investors in these ETNs have several options following the announcement. They may choose to either continue holding their ETNs, redeem them through BMO, or sell them in the secondary market. It's important for investors to note that the decision to redeem during the specified time frame following this announcement does not require meeting the usual Minimum Redemption Amount, which typically necessitates a redemption of at least 25,000 notes.

However, the rise in the financing spread could complicate the ability to sell ETNs and may have adverse effects on their market prices. BMO stresses that these products are not aimed at long-term holding strategies but are tools designed for daily trading, primarily suited for sophisticated investors who are willing to actively manage their portfolios.

Understanding ETNs and Their Market Dynamics

Exchange-Traded Notes, such as these Gold Miners ETNs, allow investors to gain leveraged exposure to the performance of the S-Network MicroSectors™ Gold Miners Index. Over time, however, returns may not align with the expected threefold returns on a direct investment in the Index. This discrepancy is due to the daily reset nature of the leverage, and investors should be aware that even if the Index performs positively in the long term, significant losses can still occur if investments are held for more than one day.

As BMO explains, these ETNs require careful, continuous monitoring. Investors must remain vigilant, making daily decisions to determine their position in these products, considering their high volatility and risk. It's paramount that participants in this market are fully aware of the associated risks and fully comprehend their investment strategies before diving into leveraged products.

Conclusion

Following the upcoming increase in financing spread, potential and current investors in the MicroSectors™ Gold Miners 3X Leveraged ETNs should take the time to review their investment strategies. Not only is it essential to understand the implications of the new fee structure, but also the overall market dynamics in which these ETNs operate. For further details on these changes and the potential impact on investments, BMO advises referring to their ETN Prospectus, available online.

For more information on BMO and its offerings, visit BMO's official website. For inquiries related to the ETNs, investors can reach out to the BMO team directly at +1 (877) 369-5412.