Bank of Montreal (BMO) announced it will conduct a 1-for-20 reverse split for its MicroSectors Gold Miners -3X Inverse Leveraged Exchange Traded Notes (ETNs), with the change expected to take effect at the start of trading on October 22, 2025. The ETNs, which are traded under the ticker symbol GDXD on NYSE Arca, will be adjusted so that holders receive one post-split ETN for every twenty pre-split ETNs they own.
For investors who hold a number of ETNs not evenly divisible by twenty, BMO stated they will receive a cash payment for any fractional notes left after the split. This payment is anticipated to be determined based on the closing Indicative Note Value on October 27, 2025 and distributed through standard procedures around October 30, 2025. The timing of account credits may vary depending on individual brokers.
After the reverse split, the closing Indicative Note Value from October 21, 2025 will be multiplied by twenty to set the new value per note. While the CUSIP number for the ETNs will change following the split, trading under the GDXD ticker symbol will continue.
BMO clarified that this reverse split only affects trading denominations and not the overall principal amount of outstanding ETNs except in cases where cash payments are made for fractional holdings.
According to BMO, "The ETNs are not intended to be 'buy and hold' investments, and are not intended to be held to maturity. Instead, the ETNs are intended to be daily trading tools for sophisticated investors to manage daily trading risks as part of an overall diversified portfolio." The bank emphasized that these products are designed for short-term use due to their leveraged exposure and risk profile.
The notes provide a three-times inverse leveraged exposure to the S-Network MicroSectors Gold Miners Index on a daily basis before fees and charges. BMO warned that returns over longer periods may differ significantly from three times the return on a direct short investment in the index because of daily resetting leverage and volatility effects.
Investors were reminded that "the ETNs should be purchased only by sophisticated investors who understand and can bear the potential risks and consequences of the ETNs that are designed to provide leveraged exposure to the short performance of the Index on a daily basis and that will be highly volatile and may experience significant losses, up to the entire amount invested, in a short period of time."
Further details about risks related to these securities can be found in documents filed with the Securities and Exchange Commission (SEC), including pricing supplements available via www.sec.gov as well as www.bmoetns.com and www.microsectors.com.
BMO Financial Group is among North America’s largest banks by assets, serving approximately 13 million customers across Canada, the United States, and select global markets.
For more information about REX Shares or MicroSectors products referenced in this announcement, visit www.rexshares.com or www.microsectors.com.