MicroSectors™ FANG+™ 3X Leveraged ETN Stock Price, News & Analysis

FNGA is the ticker symbol for the MicroSectors™ FANG+™ Index 3× Leveraged Exchange Traded Notes (ETNs) issued by Bank of Montreal ("BMO"). According to BMO, these ETNs are senior, unsecured obligations of BMO that provide three times leveraged exposure, reset on a daily basis, to the gross total return version of the NYSE FANG+® Index. The FNGA ETNs were launched in January 2018 and are linked to the same index that underlies the newer MicroSectors™ FANG+™ 3× Leveraged ETNs trading under the symbol FNGB.

The NYSE FANG+® Index referenced by the FNGA ETNs is described as an equally weighted equity index that tracks the performance of 10 highly traded growth stocks of technology and tech‑enabled companies in the technology, media & communications and consumer discretionary sectors. It is a total return index, meaning that dividends paid on the underlying securities are included in the index level. The index ticker symbol is stated as "NYFANGT" in the BMO communication.

Redemption and Delisting of FNGA ETNs

BMO has announced its intention to exercise its call right and redeem all outstanding FNGA ETNs. The call settlement date is expected to be May 15, 2025, following a call notice expected on May 1, 2025 and a call measurement period based on specified index business days. On the call settlement date, holders of FNGA ETNs are expected to receive a cash payment equal to the call settlement amount, calculated as the arithmetic mean of the closing indicative note values on each index business day in the call measurement period, in accordance with the terms of the FNGA ETNs and their prospectus.

BMO states that the FNGA ETNs will be delisted from the NYSE prior to the open of trading on the call settlement date, with the last expected day of trading being May 14, 2025. BMO has also indicated that it does not intend to issue or register additional FNGA ETNs on or after May 1, 2025 and intends to suspend further sales from inventory of the FNGA ETNs on that date.

Reason for Redemption and Relationship to FNGB ETNs

In its announcement, BMO explains that the FNGA ETNs were launched with fees and charges that reflected the market environment at that time, and that the costs associated with supporting the leverage embedded in the FNGA ETNs have increased. As a result, BMO states that the existing fees and charges applicable to the FNGA ETNs no longer reflect the current market environment, and this is cited as the reason for exercising the call right and redeeming the notes.

BMO has introduced a new series of ETNs, the MicroSectors™ FANG+™ 3× Leveraged ETNs due February 17, 2045, trading under the ticker symbol FNGB on NYSE Arca. According to BMO, the FNGB ETNs are intended to replace the FNGA ETNs and provide investors with continued access to three times leveraged, daily resetting exposure to the same NYSE FANG+® Index, but with fees and charges that reflect the current market environment. The FNGB ETNs are described as daily trading tools for sophisticated investors, with BMO emphasizing that they are not intended to be buy‑and‑hold investments or to be held to maturity.

Risk Characteristics Highlighted by the Issuer

BMO describes both the FNGA and FNGB ETNs as senior, unsecured obligations subject to BMO's credit risk. In the context of the FNGB ETNs, BMO notes that the products are designed to reflect a 3× leveraged long exposure to the daily performance of the index, before fees, charges and the decay effect caused by daily resetting of leverage. BMO also notes that, due to daily resetting, returns over periods longer than a day can differ significantly from three times the return on a direct long investment in the index, and that the ETNs are very sensitive to changes in the level and volatility of the index, with the possibility of significant losses, including loss of the entire amount invested, in a short period of time.

The issuer also states that investment suitability must be determined individually for each investor, that the ETNs are not suitable for all investors, and that investors should consult their own financial advisors and carefully review the applicable ETN prospectus and related documents filed with the U.S. Securities and Exchange Commission.

FNGA as a Historical Trading Instrument

Given BMO's stated intention to redeem all outstanding FNGA ETNs and delist them from the NYSE, FNGA should be understood as a historical leveraged ETN linked to the NYSE FANG+® Index. For ongoing leveraged exposure to the same index, BMO directs attention to the FNGB ETNs, which are described as the intended replacement product. Historical information about FNGA, including its linkage to the index and its leveraged structure, remains relevant for understanding past trading strategies and performance associated with this ticker.