BMO launched two new MAX Exchange Traded Notes (ETNs) linked to the performance of the Prime Auto Industry Index. The MAX Auto Industry 3x Leveraged ETN (NYSE Arca: CARU) and the MAX Auto Industry -3x Inverse Leveraged ETN (NYSE Arca: CARD) trade on NYSE Arca. The leveraged and inverse leveraged ETNs target stocks of U.S.-listed companies that have operations relating to the automobile industry.
Laurence Kaplan, managing director, BMO Capital Markets, said the funds let investors “trade auto industry stocks with +/- 3X leverage exposure.” This “includes automobile manufacturing, parts, and retail, and new and used car dealers,” Kaplan added.
See more: “BMO Launches +/- 3X MAX Airlines ETNs”
BMO noted, however, that the ETNs are not “buy-and-hold” investments. So, investors shouldn’t expect them to provide a 3x times leveraged return or inverse leveraged return of the index’s cumulative return for periods longer than a day.
Launched in 2023, MAX is the leveraged and inverse leveraged ETN brand of BMO. MAX ETNs provide investors with tactical leveraged exposure to market sectors to manage risk and potentially enhance returns.
The launch of CARU and CARD comes hot off the heels of BMO listing its first two MAX ETNs. Last week, BMO launched the MAX Airlines 3x Leveraged ETNs (JETU) and the MAX Airlines -3x Inverse Leveraged ETNs (JETD). JETU and JETD are linked to the performance of the Prime Airlines Index. The ETNs’ index includes stocks of U.S.-listed companies that have operations relating to the airline industry.
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