Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp)
April 09 2021 - 6:05AM
Edgar (US Regulatory)
Registration No. 333-237342
Filed Pursuant to Rule 433
Dated April 8, 2021
Member
FINRA, SIPC NOT FDIC INSURED / NOT BANK GUARANTEED / MAY LOSE VALUE Continued on next page
Overview The MicroSectors™ Gold Miners Exchange Traded Notes (ETNs) are linked to the
performance of the S-Network MicroSectors™ Gold Miners Index. Each ETN offers investors
a return based on changes in the level of the S-Network MicroSectors™ Gold Miners Index,
compounded daily, before taking into account fees. Each ETN has a specified leverage factor
that is reset daily. This fact sheet relates to two separate ETN offerings. Each ETN seeks
a return on the underlying index for a single day. The ETNs are not “buy and hold”
investments and should not be expected to provide its respective return of the underlying
index’s cumulative return for periods greater than a day. The S-Network MicroSectors™
Gold Miners Index The S-Network MicroSectors™ Gold Miners Index (“MINERS”)
tracks the performance of two of the largest gold mining exchange traded funds, the VanEck
Vectors® Gold Miners ETF (the “GDX”) and the VanEck Vectors® Junior Gold
Miners ETF (the “GDXJ”). The index’s underlying composition is market capitalization
weighted across both ETFs. More information about the index can be found here https://snetworkglobalindexes.com/indexes/s-network-microsectors-indexes.
Q1 2021 Daily Returns (1/4/2021 to 3/31/2021) The following graph illustrates, for the indicted
period, the daily changes in the closing level of the index, and the resulting changes in
closing daily closing indicative value of each ETN. Past performance is no indication of
future results as to the index, or any ETN. Ticker Exchange Traded Note GDXU MicroSectors™
Gold Miners 3X Leveraged ETN GDXD MicroSectors™ Gold Miners -3X Inverse Leveraged ETN
ETN Details GDXD GDXU Intraday Indicative Value GDXDIV GDXUIV CUSIP 063679658 063679641 ISIN
US0636796411 US0636796585 Daily Investor Fee¹ 0.95% per annum, accrued on a daily basis
0.95% per annum, accrued on a daily basis Daily Financing/Interest Rate2 US Federal Funds
Effective Rate minus the Spread of 2% per annum, accrued on a daily basis* Federal Reserve
Bank Prime Loan Rate plus the Financing Spread of 2.25% per annum, accrued on a daily basis**
Leverage Factor -3X +3X Leverage Reset Frequency Daily Daily Exchange NYSE Arca NYSE Arca
Issuer Bank of Montreal Bank of Montreal Initial Trade Date 12/2/2020 12/2/2020 Maturity
Date 6/30/2040 6/30/2040 Gold Miners Leveraged & Inverse Leveraged Exchange Traded Notes
Index Constituents Ticker Name Weight GDX VanEck Vectors® Gold Miners ETF 72.59% GDXJ
VanEck Vectors® Junior Gold Miners ETF 27.41% As of 3/22/2021. Index weightings and constituents
are subject to change. -25% -20% -15% -10% -5% 0% 5% 10% 25% 20% 15% MicroSectors™
Gold Miners -3X Inverse Leveraged ETN MicroSectors™ Gold Miners 3X Leveraged ETN S-Network
MicroSectors™ Gold Miners Total Return Index January 2021 February 2021 March 2021
Source: Bloomberg L.P. 1 The Daily Investor Fee is a per annum number that accrues on a daily
basis. 2 The Daily Financing & Interest Rates are per annum numbers that accrue on a
daily basis. The Daily Financing Rate applies to GDXU, and the Daily Interest Rate applies
to GDXD. * The Spread will initially be 2%, but may be increased to up to 4% at our option.
** The Financing Spread will initially be 2.25%, but may be increased to up to 5% at our
option. Member FINRA, SIPC NOT FDIC INSURED / NOT BANK GUARANTEED / MAY LOSE VALUE Bank of
Montreal, the issuer of the ETNs (“Bank of Montreal” or the “Issuer”),
has filed a registration statement (including a pricing supplement, a product supplement,
a prospectus supplement and prospectus with the Securities and Exchange Commission (the “SEC”)
for each of the offerings to which this document relates. Please read those documents and
the other documents relating to these offerings that Bank of Montreal has filed with the
SEC for more complete information about Bank of Montreal and these offerings. These documents
may be obtained without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively,
Bank of Montreal, any agent or any dealer participating in these offerings will arrange to
send the applicable pricing supplement, prospectus supplement and prospectus if so requested
by calling toll-free at 1-877-369-5412. The ETNs are senior, unsecured debt obligations of
Bank of Montreal and are subject to Bank of Montreal’s credit risk. Investment suitability
must be determined individually for each investor, and the ETNs may not be 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. The leveraged and leveraged inverse ETNs are intended to be
daily trading tools for sophisticated investors to manage daily trading risks as part of
an overall diversified portfolio. They are designed to achieve their stated investment objectives
on a daily basis. You should proceed with extreme caution in considering an investment in
the ETNs. The ETNs do not guarantee the return of your investment. If the Closing Indicative
Note Value or the Intraday Indicative Value for the ETNs is equal to or less than $0 at any
time during an Exchange Business Day (as described in the applicable pricing supplement),
you will lose all of your investment in the ETNs. Even if the Index level has increased or
decreased, as applicable, from the Initial Index Level, you may receive less than the principal
amount of your ETNs upon a call, redemption, at maturity, or if you sell your ETNs, as described
more in the applicable pricing supplement. Leverage increases the sensitivity of your ETNs
to changes in the level of the Index. The ETNs are not suitable for investors with longer-term
investment objectives. In particular, the ETNs should be purchased only by sophisticated
investors who do not intend to hold the ETNs as a buy and hold investment, who are willing
to actively and continuously monitor their investment and who understand the consequences
of investing in and of seeking daily resetting investment results, which are leveraged as
to these ETNs. Due to the effect of compounding, if the Indicative Note Value changes, any
subsequent adverse change of the Index level will result in a larger dollar reduction from
the Indicative Note Value than if the Indicative Note Value remained constant. The ETNs are
subject to intraday purchase risk. The Indicative Note Value is reset daily, and the leverage
or exposure of the ETNs during any given Exchange Business Day may be greater than or less
than the amount indicated by the name of the ETN. The ETNs are subject to a call right, which
may adversely affect the value of, or your ability to sell, your ETNs. The ETNs do not pay
any interest, and you will not have any ownership rights in the Index constituents. The Index
level used to calculate any payment on the ETNs may be different from the Index level at
other times during the term of the ETNs. There are restrictions on your ability to request
a redemption of the ETNs, and you will not know the amount due upon redemption at the time
you elect to request that the ETNs be redeemed. The Issuer may sell additional ETNs, but
is under no obligation to do so. Market disruptions may adversely affect your return. Significant
aspects of the tax treatment of the ETNs are uncertain. The Intraday Indicative Value and
the Indicative Note Value are not the same as the closing price or any other trading price
of the ETNs in the secondary market. There is no assurance that your ETNs will be listed
or continue to be listed on a securities exchange, and they may not have an active trading
market. The value of the ETNs in the secondary market may be influenced by many unpredictable
factors. The Issuer or its affiliates may have economic interests that are adverse to those
of the holders of the ETNs as a result of its business, hedging and trading activities, or
as Calculation Agent of the ETNs (as defined in the applicable pricing supplement), and may
have published research, expressed opinions or provided recommendations that are inconsistent
with investing in or holding the ETNs, and may do so in the future. The Index has limited
actual historical information. The Index Sponsor or the Index Calculation Agent (as defined
in the applicable pricing supplement) may adjust the Index in a way that may affect its level,
and may, in its sole discretion, discontinue the public disclosure of the intraday Index
value and the level of the Index. The Index lacks diversification and is vulnerable to fluctuations
in the precious metal mining industry. Please see the “Risk Factors” section
in the applicable pricing supplement. We urge you to consult your investment, legal, tax,
accounting and other advisers before you invest in the ETNs. MicroSectors™ and REX™
are registered trademarks of REX Shares, LLC (“REX”). The trademarks have been
licensed for use for certain purposes by Bank of Montreal. The ETNs are not sponsored or
sold 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 market performance. REX Index Parties’ only relationship to Bank of Montreal
with respect to the Index is the licensing of the Index and certain trademarks, service marks
and/or trade names of REX Index Parties. REX Index Parties are not responsible for and have
not participated in the determination of the prices, and amount of the ETNs or the timing
of the issuance or sale of the ETNs or in the determination or calculation of the equation
by which the ETNs are to be converted into cash. REX Index Parties have no obligation or
liability in connection with the administration, marketing or trading of the ETNs. Inclusion
of a security within an index is not a recommendation by REX Index Parties to buy, sell,
or hold such security, nor is it considered to be investment advice. S-Network Global Indexes,
Inc. (“S-Network”) is the licensor of the S-Network MicroSectors™ Gold
Miners Index. The ETNs are not sponsored, endorsed, sold or promoted by S-Network, or its
third-party licensors, in any way and makes no express or implied representation, guarantee
or assurance with regard to: (a) the advisability in investing in the ETNs; (b) the quality,
accuracy and/or completeness of the Index; and/or (c) the results obtained or to be obtained
by any person or entity from the use of the Index. S-Network does not guarantee the accuracy
and/or the completeness of the Index and shall not have any liability for any errors or omissions
with respect thereto. Notwithstanding S-Network’s obligations to its licensees, S-Network
reserves the right to change the methods of calculation or publication of the Index, and
S-Network shall not be liable for any miscalculation of or any incorrect, delayed or interrupted
publication with respect to the Index. S-Network shall not be liable for any damages, including,
without limitation, any loss of profits or business, or any special, incidental, punitive,
indirect or consequential damages suffered or incurred as a result of the use (or inability
to use) of the Index. Call Us 203-557-6201 Email Us info@rexshares.com Visit Us www.microsectors.com
Gold Miners Leveraged & Inverse Leveraged Exchange Traded Notes
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