MicroSectors -3x Short Semiconductor ETNs (SMHD)

MicroSectors -3x Short Semiconductor ETNs (SMHD) are exchange-traded notes issued by Bank of Montreal under its MicroSectors brand. The notes seek to return three times the inverse (-3x) of the daily performance of an index of large U.S.-listed semiconductor companies, with the leverage reset every trading day.

As ETNs, they are senior unsecured debt obligations of Bank of Montreal rather than funds that hold stocks, so returns depend on the issuer's ability to pay as well as on the index. Because the -3x factor applies to each day separately, performance over longer periods can diverge sharply from three times the inverse of the index's cumulative return.