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Leveraged FAANG ETFs: What Investors Need to Know

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  • (1: 10 ) - What Is The NYSE FANG+ Index?
  • (3: 30 ) - How Should ETN Products Be Used?
  • (6: 45 ) - What Is The ETN Structure and Who Should Be Using Them?
  • (10: 30 ) - Upcoming Products and Big Takeaways On ETNs
  • Podcast@Zacks.com

In this episode of ETF Spotlight podcast, I talked with Adam Stempel, Director at BMO Capital Markets, and Scott Acheychek, SVP and Head of Distribution at REX Shares.

In January this year, Bank of Montreal (BMO) and REX Shares launched the BMO REX MicroSectors FANG+ Index 3X Leveraged ETNs FNGU and the BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETNs FNGD that provide three times (3x) leveraged and inverse exposure respectively to the NYSE FANG Index.

Earlier this month, they added three more ETNs to the suite-the MicroSectors FANG+ Index 2X Leveraged ETNs FNGO , the MicroSectors FANG+ Index -2X Inverse Leveraged ETNs FNGZ and the MicroSectors FANG+ Index Inverse ETNs GNAF .

All these products are based on the NYSE FANG+ Index that provides exposure to a select group of highly-traded growth stocks of next generation technology and tech-enabled companies.

The index includes the FAANGs--Facebook FB , Apple AAPL , Amazon AMZN , Netflix NFLX and Alphabet GOOGL , and five other five other similar high-growth stocks selected by the index committee.

The other five holdings as of now are Alibaba BABA , Baidu BIDU , Nvidia NVDA , Tesla TSLA and Twitter TWTR .

Scott explained how the index is constituted and why equal weighting makes sense for this index.

We discussed benefits of these products and as also how investors should use these strategies in their portfolio.

Most investors love the FAANGs and other high growth stocks as they have delivered outsized returns over the past few years. But this year is slightly different. Apple, Amazon and Nvidia have soared to new highs. Facebook and Tesla have their own issues.

Further, rising trade tensions between the US and China have impacted Chinese tech stocks, even though most analysts remain bullish on them.

According to a Bloomberg report , short bets on global tech giants soared to $37 billion recently. If you love or hate FAANG stocks too much, you should look at these ETNs.

Investors understand the ETF structure well but are not so much familiar with ETNs. Adam explained what investors need to know about the ETN structure before investing in these products.

Please visit microsectors.com if you want to learn more about these products.

Make sure to be on the lookout for the next edition of the ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Baidu, Inc. (BIDU): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Twitter, Inc. (TWTR): Free Stock Analysis Report

Tesla, Inc. (TSLA): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

MCRO-FG I INV (GNAF): ETF Research Reports

MCRO-FG I2XIL (FNGZ): ETF Research Reports

BMO-RM FG I3XIL (FNGD): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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