MicroSectors -3x Short Investment Grade Corporate Bond (LQD) ETNs (LQDD)

MicroSectors -3x Short Investment Grade Corporate Bond (LQD) ETNs are exchange-traded notes issued by the Bank of Montreal under the MicroSectors brand. They seek to provide three times the inverse (-300%) of the daily performance of the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), a widely held fund of U.S. dollar investment-grade corporate bonds.

Because these are notes rather than a fund, investors do not own any bonds or shares of LQD. Instead, the ETNs are senior unsecured debt obligations of the Bank of Montreal whose value is linked to the leveraged inverse daily return, so holders are also exposed to the issuer's credit risk.

The -3x target resets each day. Over longer periods, compounding can cause results to differ greatly from three times the inverse of LQD's cumulative return, making the notes a short-term trading instrument.