Montrose is launching its second ETF listed on the Stockholm Stock Exchange. It is traded in Swedish kronor, which is good compared to foreign ETFs where you have to pay hefty currency exchange fees.
The fund is not a typical index fund, but it is still quite “straight forward”. So there are no advanced structures or anything like that, but it contains a global index and it has leverage. The fund provides 125 percent exposure to the global index.
This leverage thing works both ways and while it is an extra risk in the short term, it is a nice extra potential in the long term. The stock market goes up in the long term and therefore if you have this kind of leverage the return will be extra good. The leverage is a smart and reasonable approach because investments in the stock market should be long-term. Money you need in the next 5 years has nothing to do with the stock market.
The fund fee is 0.41 percent but on top of that there are more costs. The fund’s leverage costs are added on top of that. According to their site, the leverage cost is currently an extra 0.74 percent. The leverage gives higher returns in the long run. Despite the hefty fees in the fund, it will result in higher returns. Sure, it will be cheaper to use leverage yourself to create leverage, but there is still something convenient about a ready-made solution.
The fund will be available for trading at most online brokers. Brokers who already have Montrose Global Monthly should definitely get this one too. If you invest in it at Montrose, they offer the brokerage fee, but they are a slightly different player in general. You need to have at least 250,000 kronor with them, otherwise you have to pay a monthly fee to be a customer with them.
I think Montrose has a strong offering and now that they are up and running for real, I am looking into buying more.
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