#What are the new investment options for the AI sector?
Rex Shares and Bank of Montreal have joined forces to offer traders two innovative investment products focusing on artificial intelligence. On June 2, 2026, they launched the MicroSectors-branded exchange-traded notes, namely the MicroSectors 3x Long Artificial Intelligence ETN and the MicroSectors -3x Short Artificial Intelligence ETN.
These notes, which trade on NYSE Arca, are designed to deliver three times the daily performance of the BITA AI Leaders Select NTR US Index. In simple terms, the 3x Long ETN aims to amplify daily gains associated with the AI index, while the -3x Short ETN seeks to triple the inverse performance of the same index.
#What is the BITA AI Leaders Select NTR US Index?
This underlying index, known as the BITA AI Leaders Select NTR US Index, tracks 25 companies listed in the US that focus on artificial intelligence. These companies are categorized into two groups: the “Purity Leaders,” which generate a significant portion of their revenue from AI, and the “Key Enablers,” the major technology companies that provide the necessary infrastructure for AI advancements.
Unlike traditional market-cap weighted indexes, this index uses equal weighting, ensuring that all the companies in it are considered more or less equally, thus giving investors balanced exposure.
#What is the structure of these exchange-traded notes?
Both of these exchange-traded notes have a maturity date set for May 30, 2046, making them senior unsecured obligations issued by Bank of Montreal. It is essential to note that ETNs are different from exchange-traded funds, or ETFs. With an ETF, investors own the underlying assets, while an ETN is essentially a promise from the bank to deliver returns linked to the defined index. Therefore, if Bank of Montreal faces any financial difficulties over the next two decades, holders of these notes could be exposed to credit risk—a risk ETF investors do not deal with.
#How does Rex Shares approach AI investment?
Rex’s involvement with AI investment is not limited to these new ETNs. The firm previously launched a covered-call ETF, AIPI, in June 2024, aimed at generating income through AI equities. This product took a more conservative stance by employing a strategy that involves selling call options against AI stock holdings to create yield.
In contrast, the newly launched ETNs represent a more aggressive strategy. With triple leverage, these products magnify any gains or losses by three times on a daily basis, making them suited for short-term trading rather than long-term investment. This daily reset feature can cause returns to diverge from three times the cumulative returns of the index over extended periods—a phenomenon known as leverage decay.
To illustrate, if the AI index experiences a 10% drop in one session and then a 10% rise in the following one, your net position would not merely break even; you would end up down 1%. With 3x leverage, the dynamics change drastically, resulting in steeper declines and gains, ultimately leading to a 9% loss after two days.
#What should investors know before trading these ETNs?
Analysts suggest that the timing of this launch may be indicative of profit-taking trends in AI stocks, rather than an outright bullish atmosphere. Anyone considering the MicroSectors ETNs should be acutely aware of two significant risks. The first is leverage decay, which can diminish returns for anyone holding these instruments for more than one day, especially in volatile market conditions. The second critical point is the credit risk posed by Bank of Montreal. Holding an ETN for two decades introduces two decades of potential counterparty risk. While these products are intended for active trading, understanding their structural integrity is crucial for any investor thinking about entering this market.