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The Bank of Montreal launched five new exchange-traded notes (ETNs) Thursday, expanding its range of leveraged and inverse investment products.
The Canadian banking firm has also been quietly ramping up its Bitcoin ETF holdings, reflecting a growing interest in the cryptocurrency market.
For the uninitiated, ETNs are mostly similar to ETFs. The difference is they invest in debt like bonds. Also, they attract lesser taxes because they do not pay dividends.
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BMO's latest ETNs target the energy sector through the Solactive MicroSectors U.S. Big Oil Index, which consists of major oil players such as Exxon Mobil (NYSE:XOM), Valero Energy (NYSE:VLO), Phillips 66 (NYSE:PSX), Occidental Petroleum (NYSE:OXY), and Chevron (NYSE:CVX). The bank has introduced two ETNs for investors with opposing market views:
MicroSectors U.S. Big Oil 3X Leveraged ETNs (NYSE:NRGU), which seeks to generate three times the daily return of the index, and MicroSectors U.S. Big Oil -3X Inverse Leveraged ETNs (NYSE:NRGD), which provides the inverse, delivering negative three times the index's daily movement.
These products allow investors to make tactical bets on the energy market, especially as oil prices remain highly sensitive to geopolitical and economic changes.
BMO hasn’t left the financial sector behind, with new leveraged and inverse ETNs tied to the Solactive MicroSectors U.S. Big Banks Index. This index tracks heavyweights such as JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), and Bank of America.
The MicroSectors U.S. Big Banks 3X Leveraged ETNs (NYSE:BNKU) provides three times the daily return of the index. On the other hand, the MicroSectors U.S. Big Banks -3X Inverse Leveraged ETNs (NYSE:BNKD) moves in the opposite direction, offering negative three times the daily performance.
BMO has also recently made a significant push into Bitcoin ETFs. According to a February report from Binance, which cited an SEC filing by BMO, the bank has upped its Bitcoin ETF holdings from $13 million to $150 million, a staggering 1053.85% increase in just one quarter.
Regulatory filings submitted to the U.S. SEC on January 13 revealed that BMO had allocated $139 million to BlackRock's iShares Bitcoin ETFs, with the remaining $11 million divided among ETFs from ARK 21Shares, Grayscale, and Fidelity.
The leveraged and inverse ETNs cater to active traders looking for higher exposure to high-momentum sectors, while the Bitcoin ETF investment signals institutional optimism in crypto's long-term potential.
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Posted In: BNKD BNKU C CVX GS JPM MS NRGD NRGU OXY PSX VLO XOM
