An investor who put $10,000 into FNGU on June 1, 2026 watched it shrink by roughly 28.88% in a single month, while the Nasdaq-100 barely moved. That gap is the product working as designed. It is also the hidden cost the marketing page will never lead with.
What You’re Actually Paying
The MicroSectors FANG+ Index 3X Leveraged ETN (NYSEARCA:FNGU) is a 3x daily-reset exchange-traded note issued by Bank of Montreal. Industry-standard MicroSectors 3x notes carry an investor fee of roughly 0.95% annualized on notional, which works out to about $95 per year for every $10,000 of exposure.
Compare that to Invesco QQQ (NASDAQ:QQQ), which tracks the Nasdaq-100 and captures most of the same mega-cap tech names. Or Technology Select Sector SPDR (NYSEARCA:XLK), with a net expense ratio of just 0.08%, or roughly $8 per year per $10,000. Over 20 years, that annual fee gap alone, before any performance drag, becomes a several-thousand-dollar tax on the same broad tech thesis.
The Part the Factsheet Doesn’t Highlight
The fee is the small hidden cost. The structural one is worse. FNGU resets its 3x leverage daily, which means in choppy markets, the math quietly bleeds value even when the underlying index ends flat. Volatility decay is the technical name.
June 2026 was a live demonstration. The VIX ranged from 15.40 to 22.22 across the month, with sustained readings between 17 and 22. That is ordinary noise. Yet FNGU fell 28.88% from June 1 to June 30, while QQQ slipped only 0.85% over the same window. The one-year picture is starker: FNGU is up 3.29% against QQQ’s 33.49%. Year-to-date, FNGU has returned 1.78% versus 19.87% for QQQ.
Three more cost mechanisms sit under that decay. First, FNGU is an ETN, meaning holders are unsecured creditors of Bank of Montreal. If BMO defaults, the note can go to zero regardless of how the FANG+ index performs. Second, the NYSE FANG+ Index holds only about 10 equal-weighted mega-cap tech names, so concentration risk is extreme even before you triple it. Third, ETN gains on equity-index notes are generally taxed as ordinary income on sale, stripping out the qualified-dividend and long-term capital-gains treatment a plain ETF holder would get.
The Cheaper Mirror
For the same basket without the daily-reset gearing, MicroSectors offers MicroSectors FANG+ Index ETN (NYSEARCA:FNGS), the 1x version of the identical index. Same issuer credit risk, but no leverage decay. For broader, ETF-wrapped tech exposure with no ETN credit layer, QQQ runs at an expense ratio around 0.20%, and XLK sits at 0.08%. XLK’s top three holdings (NVIDIA, Apple, Microsoft) already make up 39.99% of the fund, so the mega-cap tech tilt is largely preserved. The trade-off is straightforward: you give up the 3x daily kick on green days. You also give up the 3x daily bleed on every other day.
What This Means for You
FNGU is a trading tool that happens to trade on an exchange. Held for a month through ordinary volatility, it lost nearly a third of its value while the index it triples was flat. The question worth asking is whether you are buying tech exposure, or renting a short-dated derivative and paying $95 per $10,000 a year for the privilege.
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