Bank of Montreal has launched 4X leveraged exchange-traded notes (ETNs) linked to the S&P 500 Total Return Index. The MAX S&P 500 4x Leveraged ETNs (XXXX ) trade on the NYSE.
These ETNs have been designed to offer a return linked to a four-times leveraged participation in the Index’s daily performance, before fees and charges. According to CFRA, this will be the highest leveraged exchange traded product in the U.S.
The Index intends to indicate the pattern of U.S. large-cap stock price movement. It’s a total return index in which dividends paid on the applicable securities are included in the Index’s level.
See more: BMO Launches +/- 3X MAX Airlines ETNs
These ETNs offer a means of potentially enhancing their returns (and accordingly, of potentially increasing their losses) while tracking the Index’s performance.
“With the launch of these 4X leveraged ETNs, we continue to foster a diversified and dynamic investment landscape,” said Adam Stempel, managing director, BMO Capital Markets. “As investors seek strategies to navigate evolving market conditions, we provide access to innovative tools designed to meet their various needs.”
BMO noted that these ETNs are not “buy and hold” investments. So, don’t expect XXXX to provide a 4x leveraged return of the index’s cumulative return for longer than a day.
BMO’s Growing MAX ETN Brand
Launched in 2023, MAX is the leveraged and inverse leveraged ETN brand of BMO. MAX ETNs offer efficient, tactical leveraged exposure to market sectors to manage risk and potentially enhance returns.
In June, BMO launched its first two MAX ETNs 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 ) also trade on the NYSE.
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.
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