The MicroSectors FANG+™ Index 3X Leveraged ETN (FNGU) is an exchange-traded note designed to deliver three times the daily performance of the NYSE FANG+ Index. The product is issued by the Bank of Montreal (BMO) and trades under the ticker FNGU on the Nasdaq.

Classified as a leveraged equity ETN, the note provides concentrated exposure to some of the largest technology and growth companies in the U.S. market. Unlike a traditional ETF, FNGU is a debt obligation of its issuer and does not hold a physical portfolio of underlying stocks.

The ETN employs daily 3x leverage, seeking to amplify the daily returns of its benchmark. As a result, it is primarily intended for investors who understand the risks associated with leverage, daily rebalancing, and short-term trading strategies.

Diversification and sector exposure

FNGU provides exposure primarily associated with:

• Mega-cap technology companies.

• Artificial intelligence.

• Cloud computing.

• E-commerce.

• Social media platforms.

• Semiconductors.

• Digital platforms.

• Growth-oriented businesses.

The underlying index consists of a concentrated group of companies widely associated with technological innovation, including businesses operating in artificial intelligence, software, internet services, e-commerce, and digital infrastructure.

The ETN’s performance is heavily influenced by movements in leading U.S. technology stocks. Because the strategy employs daily leverage, both gains and losses tend to be magnified relative to the benchmark.

Structure and costs

FNGU notes trade on the secondary market on the Nasdaq during regular trading hours. As an ETN, the product does not directly own the securities that make up the underlying index but instead represents a financial obligation of the issuer.

The note charges a management fee as outlined in its prospectus and does not apply a performance fee.

Because the product seeks to provide three times the daily return of its benchmark, performance over periods longer than a single trading day may differ substantially from three times the cumulative return of the index due to the effects of daily compounding.

In addition to market risk, investors are exposed to issuer credit risk, a characteristic inherent to ETN structures.

History and evolution of the ETF

FNGU was launched in 2018 amid growing demand for leveraged products focused on technology and high-growth companies.

Since inception, the note has tracked some of the most influential companies in the U.S. market, reflecting developments tied to the expansion of the digital economy, cloud computing, artificial intelligence, and broader technological innovation.

In recent years, FNGU has been among the products most sensitive to movements in large-cap technology stocks, participating in both strong market rallies and periods of heightened volatility driven by changes in interest rates, liquidity conditions, and expectations for the technology sector.

Additional Information

MicroSectors FANG+™ Index 3X Leveraged ETN (United States) is an exchange-traded fund (ETF), with assets under management totaling $6.87 billion.

Over the past 12 months, MicroSectors FANG+™ Index 3X Leveraged ETN recorded a return of 2.58%, with its price trading between $13.73 and $36.15 during the same period.

The ETF is traded under the ticker FNGU.