Bank of Montreal (BMO) has announced an increase in the financing spread for its MicroSectors Gold Miners 3X Leveraged Exchange Traded Notes (ETNs), which are listed on NYSE Arca under the ticker symbol GDXU. The change will take effect on November 21, 2025.
The financing spread for these ETNs will rise from 2.25% to 3.25%. According to BMO, "the closing Indicative Note Value of the ETNs reflect the daily deduction of a Daily Financing Charge and the other fees and charges described in the ETN Prospectus. The Daily Financing Charge is based on the Federal Reserve Bank Prime Loan Rate plus the Financing Spread. Therefore, given the Financing Spread is increasing, the Daily Financing Charge will also increase, and your return on the ETNs will be adversely affected."
Investors holding these ETNs have several options: they may continue to hold their securities, elect to require BMO to redeem them as per ETN terms, or sell them in the secondary market. During a period from this announcement up to and including November 21, there is no minimum redemption amount required; outside this period, redemptions must be made in blocks of at least 25,000 notes.
BMO cautioned investors that "the issuance of this notice of the election to increase the Financing Spread may adversely impact your ability to sell the ETNs and/or will likely adversely impact the price at which you may be able to sell your ETNs." The bank also emphasized that these leveraged products are not intended for long-term investment or a buy-and-hold strategy but are instead designed as daily trading tools for sophisticated investors managing short-term risk.
According to BMO's statement: "The ETNs are considerably riskier than securities that have intermediate- or long-term investment objectives, and are not suitable for investors who plan to hold them for a period of more than one day or who have a 'buy and hold' strategy. Investors should actively and continuously monitor their investments in the ETNs on an intra-day basis... The ETNs are very sensitive to changes in the level of the Index, and returns on the ETNs may be negatively impacted in complex ways by volatility..."
Further details about risks associated with these products can be found in documents filed with U.S. regulators via EDGAR at www.sec.gov as well as product-specific sites such as www.bmoetns.com and www.microsectors.com.
BMO Financial Group reports total assets of $1.4 trillion as of July 31, 2025, serving customers across Canada, United States, and select global markets over its two-century history.
REX Shares is identified as a provider involved with innovative exchange-traded products like MicroSectors; it manages over $8 billion in assets through various ETP offerings including leveraged strategies.