MicroSectors™ Gold Mns 3X Inv Lvrgd ETN Stock Price, News & Analysis

MicroSectors Gold Miners -3x Inverse Leveraged ETN (GDXD) is an exchange-traded note issued by Bank of Montreal ("BMO"). According to BMO, these ETNs are senior, unsecured obligations of the bank and are designed as daily trading tools for sophisticated investors. The notes are linked to the S-Network MicroSectors Gold Miners Index and are intended to provide 3x leveraged short exposure to the daily performance of that index, before fees and charges.

The ETNs trade on the NYSE Arca exchange under the ticker symbol GDXD. BMO states that the ETNs are not intended to be buy-and-hold investments or to be held to maturity. Instead, they are structured for investors who actively manage positions on a daily or even intraday basis. Because of the daily resetting of leverage and the effects of index volatility, performance over periods longer than a single day can differ, and often differ significantly, from three times the return of a direct short investment in the underlying index.

Investment objective and structure

According to the issuer, the MicroSectors Gold Miners -3x Inverse Leveraged ETNs are designed to reflect a three-times leveraged short exposure to the S-Network MicroSectors Gold Miners Index on a daily basis. The index performance, combined with the daily reset of leverage, means the ETNs can be very sensitive to changes in the level and volatility of the index. BMO highlights that it is possible for investors to experience significant losses in a short period of time, including the loss of the entire amount invested.

The ETNs are unsecured debt obligations of Bank of Montreal and are therefore subject to the credit risk of the issuer. BMO has filed a pricing supplement and related documents with the U.S. Securities and Exchange Commission (the "ETN Prospectus") that describe the terms of the notes, the index, and the associated risks in more detail. The issuer indicates that investors should review these documents carefully before making any investment decision.

Reverse split information

BMO announced that it will implement a 1-for-20 reverse split of the outstanding MicroSectors Gold Miners -3X Inverse Leveraged ETNs due June 29, 2040, which trade under the ticker GDXD. The issuer expects the reverse split to be effective at the open of trading on October 22, 2025, with the ETNs beginning to trade on a reverse split-adjusted basis on that date. Following the reverse split, the ETNs will have a new CUSIP but will continue to trade under the ticker symbol GDXD.

Under the terms described by BMO, holders who purchased the ETNs prior to the effective date will receive one reverse split-adjusted ETN for every twenty pre-reverse split ETNs. Investors holding a number of ETNs not evenly divisible by twenty will receive a cash payment for any fractional ETNs, referred to as "Partials." The cash payment for Partials is expected to be based on the closing Indicative Note Value on a specified date, with payments made through standard procedures via The Depository Trust Company.

BMO explains that the reverse split affects the trading denominations of the ETNs but does not change the aggregate principal amount of the ETNs outstanding, other than the reduction associated with any cash payments for fractional positions. The closing Indicative Note Value on the trading day before the effective date is expected to be multiplied by twenty to determine the reverse split-adjusted closing Indicative Note Value.

Risk profile and suitability

The issuer characterizes GDXD as considerably riskier than securities with intermediate- or long-term investment objectives. Because the ETNs are designed to achieve their stated objective on a daily basis, the compounding effects of daily leverage and index volatility can cause returns over longer periods to diverge from three times the inverse of the index’s cumulative performance. BMO notes that the ETNs are not suitable for investors who plan to hold them for more than one day or who follow a buy-and-hold strategy.

BMO further states that investors should actively and continuously monitor their ETN positions on at least a daily basis, and that any decision to hold the ETNs for more than one day should be made with great care and only as the result of a series of daily or more frequent decisions. The issuer emphasizes that the ETNs may experience significant losses, up to the entire amount invested, over very short time frames.

Issuer and regulatory context

The MicroSectors Gold Miners -3x Inverse Leveraged ETNs are issued by Bank of Montreal, which files reports with the U.S. Securities and Exchange Commission as a foreign issuer under Form 40-F and Form 6-K. In its SEC filings, Bank of Montreal identifies itself as the registrant and provides information such as annual reports, earnings coverage ratios, and consolidated capitalization. Certain 6-K filings state that their contents are incorporated by reference into registration statements on Form F-3 and Form S-8, which relate to the bank’s securities offerings.

The ETNs are described by BMO as senior, unsecured obligations of the bank. As such, holders of GDXD are exposed to the credit risk of Bank of Montreal in addition to the market risk associated with the leveraged short exposure to the S-Network MicroSectors Gold Miners Index. The ETN Prospectus, as referenced by BMO, provides additional detail on these obligations and the legal structure of the notes.

Role within MicroSectors and leveraged products

The MicroSectors Gold Miners -3x Inverse Leveraged ETN is part of the MicroSectors product line associated with REX Shares and Bank of Montreal. In the reverse split announcement, BMO notes that MicroSectors and REX are trademarks of REX and that the index has been licensed for use by REX. The ETNs are not sponsored, endorsed, sold, or promoted by REX or any of its affiliates or licensors, and those parties make no representation or warranty regarding the advisability of investing in the ETNs or the ability of the index to track general stock market performance.

Within this context, GDXD serves as a tool for investors who seek leveraged inverse exposure to the gold miners segment represented by the S-Network MicroSectors Gold Miners Index. The issuer’s disclosures focus on the specialized, trading-oriented nature of the product, the importance of understanding daily leverage and volatility effects, and the need for investors to assess whether such an instrument is appropriate for their individual circumstances.

Key considerations for investors

• The ETNs are intended for sophisticated investors who understand leveraged and inverse products and can bear the risks described by BMO.
• The notes are designed to achieve their stated objective on a daily basis, and performance over longer periods can differ substantially from three times the inverse of the index’s cumulative return.
• The ETNs are unsecured obligations of Bank of Montreal and are subject to the bank’s credit risk.
• A 1-for-20 reverse split is expected to change the trading denomination and CUSIP of the ETNs while maintaining the ticker symbol GDXD and leaving the aggregate principal amount unchanged except for adjustments related to fractional positions.
• BMO directs prospective investors to the ETN Prospectus filed with the SEC for a full discussion of terms and risks.