BMO today announced the launch of two exchange traded notes linked to the performance of the Prime Airlines Index. The MAX Airlines 3x Leveraged ETNs (JETU ) and the MAX Airlines -3x Inverse Leveraged ETNs (JETD ) begin trading on the New York Stock Exchange.
The ETNs’ index includes stocks of U.S.-listed companies that have operations relating to the airline industry. According to Laurence Kaplan, managing director, BMO Capital Markets, this includes manufacturers of airlines and aircrafts, plus aircraft parts. The index also features companies in the business of air freight and logistics, aircraft leasing, and airline and airport operations.
JETU’s return is linked to a 3x times leveraged participation in the daily performance of the index, minus applicable fees. JETD’s return, meanwhile, is linked to a 3x times inverse leveraged participation in the index’s daily performance, minus applicable fees.
Launched in 2023, MAX is the leveraged and inverse leveraged ETN brand of BMO. MAX ETNs provide investors with tactical leveraged exposure to market sectors to manage risk and potentially enhance returns. JETU and JETD are BMO’s first two MAX ETNs.
Kaplan added that he was “excited to launch MAX ETNs” with JETU and JETD and “thrilled to offer sophisticated investors the option to trade airline stocks with +/- 3X leverage exposure.”
BMO noted, however, that the ETNs are not “buy and hold” investments. So, investors shouldn’t expect them to provide a 3x times leveraged return or inverse leveraged return of the index’s cumulative return for periods longer than a day.
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