BMO Announces Upcoming Increase to the Financing Spread for its MicroSectorsTM Gold Miners 3X Leveraged ETNs (NYSE Arca: GDXU)
MWN-AI** Summary
On January 30, 2026, Bank of Montreal (BMO) announced an increase in the Financing Spread for its MicroSectors™ Gold Miners 3X Leveraged Exchange Traded Notes (ETNs) under the ticker symbol GDXU. Effective February 6, 2026, the Financing Spread will rise from 3.25% to 5.00%. This shift, executed by BMO Capital Markets Corp., the ETNs' Calculation Agent, is a strategic decision permissible under the terms outlined in the ETN Prospectus.
The increase in the Financing Spread directly affects the Daily Financing Charge, which is determined by the Federal Reserve Bank's Prime Loan Rate alongside the Financing Spread. Consequently, this adjustment will likely lower the overall return for current investors in the GDXU ETNs. To navigate this change, investors have options: they can continue holding the ETNs, redeem them—without the usual Minimum Redemption Amount rule on redemptions before the Fee Effective Date—or sell them in the secondary market.
BMO cautioned that this increase might adversely affect the liquidity and market price of the ETNs, which are specifically designed for sophisticated investors seeking daily trading opportunities rather than long-term holdings. The ETNs aim to provide a 3x leveraged exposure to the S-Network MicroSectors™ Gold Miners Index on a daily basis, but the performance can significantly deviate from the expected leverage over longer periods due to the nature of daily resetting leverage.
Investors are encouraged to review the ETN Prospectus thoroughly before making investment decisions, as these financial instruments carry substantial risks, including potential losses up to their entire value.
MWN-AI** Analysis
BMO's recent announcement of an increase in the financing spread for its MicroSectors™ Gold Miners 3X Leveraged ETNs (GDXU) has significant implications for investors and the broader market. The adjustment pushes the financing spread from 3.25% to 5.00%, effective February 6, 2026, which directly raises the Daily Financing Charge. This may adversely affect investor returns, particularly for those holding GDXU for longer periods.
Investors should note that the ETNs are designed for short-term trading, aiming to offer 3X leveraged exposure to the performance of the S-Network MicroSectors™ Gold Miners Index on a daily basis. The increased financing costs will erode returns more steeply, especially in a market characterized by volatility. For sophisticated traders, this might signal a strategic opportunity to adjust positions or lock in profits before the new charges take effect. Given that the ETNs are sensitive to daily price movements, investors must employ precise short-term trading strategies.
Furthermore, with the backdrop of fluctuating gold prices, rising global inflation, and ongoing geopolitical uncertainties, these factors must be considered in any trading decision involving GDXU. A potential strategy for existing holders could involve monitoring market indicators closely and evaluating whether to sell before the fee change, redeem the ETNs for cash during the redemption period, or prepare for a shorter holding period moving forward.
In conclusion, while the increase in the financing spread complicates the return profile of GDXU, it also serves as a reminder of the inherent risks associated with leveraged products. Investors are advised to reassess their strategies and risk tolerance in light of these changes, seeking out alternative investment vehicles if necessary. Adequate due diligence and careful market analysis will be key to navigating this new landscape effectively.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
NEW YORK, Jan. 30, 2026 /PRNewswire/ - Bank of Montreal ("BMO") today announced that pursuant to the terms of BMO's MicroSectorsTM Gold Miners 3X Leveraged Exchange Traded Notes due June 29, 2040 (the "ETNs"), BMO Capital Markets Corp., the Calculation Agent of the ETNs, is electing to exercise its right to increase the Financing Spread for the ETNs. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the ETN Prospectus (as defined below) for the ETNs.
It is expected that effective as of February 6, 2026 (the "Fee Effective Date"), the Financing Spread will be increased as follows:
ETN Title
| Ticker Symbol | CUSIP | Current | Adjusted |
MicroSectorsTM Gold | GDXU | 063679542 | 3.25 % | 5.00 % |
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 that the Financing Spread is increasing, the Daily Financing Charge will also increase. As a result, the return on investor's ETNs will be adversely affected.
Holders of the ETNs may choose to continue to hold their ETNs, or they may choose to elect to require BMO to redeem their ETNs, in accordance with the terms of the ETNs, or sell their ETNs in the secondary market. As disclosed in the ETN Prospectus for the ETNs, the Minimum Redemption Amount will not be applicable for any redemption validly elected on or after the date of this announcement to and including the Fee Effective Date. Outside of this period, holders of the ETNs are required to redeem at least 25,000 ETNs at one time in order to exercise their right to require BMO to redeem them.
Disclosures
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 investors may be able to sell their ETNs.
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 ETNs are designed to reflect a 3x leveraged long exposure to the performance of the S-Network MicroSectorsTM Gold Miners Index (the "Index") on a daily basis, before taking into account the negative effect of the fees and charges. However, as a result of the daily resetting leverage, the returns on the ETNs over different periods of time can, and most likely will, differ significantly from three times the return on a direct long investment in the Index. The ETNs are designed to achieve their stated investment objectives on a daily basis. The performance of the ETNs over different periods of time can differ significantly from their stated daily objectives. 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, and 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) investment decisions to remain invested in the ETNs for the next one-day period. The ETNs are very sensitive to changes in the level of the Index, and returns on the ETNs may be negatively affected in complex ways by the volatility of the Index on a daily or intra-day basis. It is possible that investors will suffer significant losses in the ETNs even if the long-term performance of the Index is positive. Accordingly, 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 exposure to the leveraged 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.
For additional information, including a discussion of the risks relating to an investment in the ETNs, please carefully read the pricing supplement and related documents that we have filed with respect to the ETNs (collectively, the "ETN Prospectus"). Investors should review the ETN Prospectus carefully prior to making an investment decision.
The ETN Prospectus can be found on EDGAR, the Securities and Exchange Commission (the "SEC") website at: www.sec.gov, as well as on the product websites at the following links: www.bmoetns.com and www.microsectors.com
Bank of Montreal, the issuer of the ETNs, has filed a registration statement (including a pricing supplement, product supplement, prospectus supplement and prospectus) with the SEC regarding the ETNs. Please read those documents and the other documents relating to this offering that Bank of Montreal has filed with the SEC for more complete information about Bank of Montreal and this offering. These documents may be obtained without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Bank of Montreal, and any agent or dealer that participated in the offering of the ETNs, will arrange to send the pricing supplement, the product supplement, the prospectus supplement and the prospectus if so requested by calling toll-free at 1-877-369-5412.
The ETNs are senior, unsecured obligations of BMO, and are subject to BMO's credit risk.
Investment suitability must be determined individually for each investor, and the ETNs are not suitable for all investors. This information is not intended to provide and should not be relied upon as providing accounting, legal, regulatory or tax advice. Investors should consult with their own financial advisors as to these matters.
About REX Shares
REX Shares ("REX") is a leading provider of innovative exchange-traded products ("ETPs"). With over $8 billion in assets under management, REX is known for pioneering the MicroSectors™ and T-REX product lines, offering leveraged and inverse exposure to a variety of stocks and market sectors. REX continues to drive innovation through its growing suite of ETPs, serving investors seeking sophisticated trading tools, options-based income strategies, and unique crypto exposures.
For more information, please visit www.rexshares.com or www.microsectors.com
Follow REX (@REXShares) and MicroSectors (@msectors) on X.
REX Media Contacts: rexshares@gregoryfca.com
About BMO Financial Group
BMO Financial Group is the seventh largest bank in North America by assets, with total assets of $1.5 trillion as of October 31, 2025. Serving clients for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to approximately 13 million clients across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.
Bank of Montreal ETNs: US.ETN@bmo.com, +1 (877) 369-5412
Internet: www.bmo.com
MicroSectors™ and REX™ are trademarks of REX. The trademarks have been licensed for use for certain purposes by REX. The Index have been licensed for use by REX. The ETNs are not sponsored, endorsed, sold or promoted by REX or any of its affiliates or third-party licensors (collectively, "REX Index Parties"). REX Index Parties make no representation or warranty, express or implied, to the owners of the ETNs or any member of the public regarding the advisability of investing in securities generally or in the ETNs particularly or the ability of the Index to track general stock market performance.
SOURCE BMO Financial Group
FAQ**
How will the increase in the Financing Spread from 3.25% to 5.00% impact the Daily Financing Charge for investors holding the MicroSectors™ Gold Miners 3X Leveraged ETNs, and what does this mean for potential returns on these investments? - Bank of Montreal BMO:CC
Given that the financing spread is increasing, what measures can investors in the MicroSectors™ Gold Miners 3X Leveraged ETNs take to mitigate adverse effects on their returns and overall investment strategy? - Bank of Montreal BMO:CC
Can you elaborate on why the ETNs are designed specifically for daily trading rather than long-term holding, especially in the context of the recently announced increase in the Financing Spread? - Bank of Montreal BMO:CC
In light of the Financing Spread increase, how has BMO addressed concerns regarding the liquidity and marketability of its MicroSectors™ Gold Miners 3X Leveraged ETNs for sophisticated investors? - Bank of Montreal BMO:CC
**MWN-AI FAQ is based on asking OpenAI questions about MicroSectors Gold Miners 3X Leveraged ETN (NYSE: GDXU).
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