Bad Dracula


BMO lists leveraged FANG ETNs

For those thinking it is high time the tech giants came down to earth, Canadian banking giant BMO is listing three new ETNs that offer inverse and leveraged exposure to the FANGs “microsector”.

  • BMO REX MicroSectors FANG Index 2X Leveraged ETN (FNGO)
  • BMO REX MicroSectors FANG Index -2X Inverse Leveraged ETN (FNGZ)
  • BMO REX MicroSectors FANG Index Inverse ETN

The ETNs will track the NYSE FANG+ Index, which includes Facebook, Amazon, Netflix and Google – but also Apple, Twitter, Nvidia and Tesla. Chinese tech giants Alibaba and Baidu (but not Tencent) are added for good measure.

As with all other leveraged and inverse ETPs, the funds will be subject to daily resets of the percentage change in the underlying index.

Analysis – this is all good fun

Leveraged and inverse ETFs are a lot of fun – so long as you don’t hold them for too long. And inverse products that track the FANGs sector are even more fun still – especially given how well timed this listing is.

It goes without saying but today’s new listings are obviously products for speculators – not investors. Aside from the fact that they’re leveraged and inverse, the index is not really a proper index. The index is made of 10 companies chosen simply because their share prices have gone up the past three years. The index provider has then had the marketing wisdom to call these ten companies a “microsector”.