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BULZ Basics and Product Design
BULZ (MicroSectors FANG & Innovation 3X Leveraged ETN) targets 3x the daily return of the Solactive FANG Innovation Index. Like FNGU, it is a MicroSectors-brand ETN issued as senior unsecured debt of Bank of Montreal (BMO), with a 0.95% annual investor fee. Launched in 2021, it positions itself as an 'expanded version' of FNGU.
While FNGU concentrates on 10 stocks, BULZ holds 15. The index actually consists of 8 fixed core names (Apple, Amazon, Meta, Alphabet, Microsoft, Netflix, NVIDIA, and Tesla) plus the 7 most-traded stocks drawn from FactSet technology industries, equally weighted, rebalanced monthly and reconstituted quarterly (per issuer MicroSectors disclosures, checked August 2026). This provides broader diversification than FNGU, but 15 stocks is still highly concentrated compared to the S&P 500's 500 or NASDAQ100's 100, making it a high-risk product regardless.
BULZ shares the ETN structure with FNGU, carrying the same issuer credit risk dependent on BMO's financial health.
Composition Differences from FNGU
As of the end of July 2026, BULZ holds the 8 core names plus Broadcom, Micron, Oracle, AMD, Intel, SanDisk, and Palantir, for a total of 15 stocks (per issuer MicroSectors data). All 10 stocks of FNGU (the NYSE FANG+ Index) as of the same date are also in BULZ, and the 5 names unique to BULZ are Tesla, Oracle, AMD, Intel, and SanDisk. The 7 volume-selected slots are reviewed at the quarterly reconstitutions (4 times a year), so the lineup can change over time; current holdings should be verified on the official site.
With 15 equally weighted stocks, each carries approximately 6.67% weight versus FNGU's 10%. This enhances diversification but also dilutes the benefit of any single stock's surge.
The volume-selected slots tend to admit names with sharper price swings than the 8 core stocks. In the 2026 lineup, stocks like Palantir can move sharply in a single day, which can push overall index volatility higher.
Performance Comparison and Concentration Effects
Since BULZ launched in 2021, long-term comparison data with FNGU is limited. However, during the 2022 bear market, BULZ recorded even steeper declines than FNGU. Many of the volume-selected holdings at the time were high-valuation growth stocks particularly vulnerable to rising rates.
Conversely, in the 2023 recovery, FNGU outperformed BULZ. The AI boom's benefits concentrated in NVIDIA, Meta, and Microsoft, and FNGU's higher weighting per stock (10% each) proved advantageous. BULZ diluted these gains to 6.67% per name.
From a compound interest perspective, higher volatility means greater decay. If BULZ's additional stocks push overall index volatility higher, its long-term decay rate may exceed FNGU's. Diversification reduces risk in unleveraged portfolios, but at 3x leverage, diversification benefits can be offset by increased decay.
The Diversification vs Volatility Decay Tradeoff
In the unleveraged world, adding stocks unconditionally reduces risk. But leveraged products behave differently. Volatility decay increases proportionally to the square of volatility, so unless diversification actually lowers volatility, adding stocks does not improve decay.
Whether BULZ's 15 stocks achieve lower volatility than FNGU's 10 depends on correlation among the additional names. Low correlation would reduce volatility through diversification, mitigating decay. However, since all are technology and innovation stocks, correlations tend to be high.
Empirical data suggests BULZ's base index volatility is roughly equal to or slightly higher than FNGU's. This means the additional stocks are not functioning as true diversification. It confirms the investment principle that 'diversification within the same sector is not real diversification.'
Decision Criteria - Which to Choose
Choose FNGU if you have strong conviction in the FANG+ 10 stocks and can tolerate concentration risk. In environments where specific large-cap tech names lead the market, such as during the AI boom, FNGU's concentration works in your favor.
Choose BULZ if you want broader exposure across the technology and innovation landscape. If you believe the next growth driver will emerge from outside FNGU's 10 names, BULZ is better positioned to capture it. However, as noted, diversification benefits are limited.
Practically, liquidity differences matter. FNGU has vastly higher volume and tighter bid-ask spreads than BULZ. For short-term trading where transaction costs accumulate, FNGU's superior liquidity is advantageous.
Main Differences Between BULZ and FNGU
| Item | BULZ | FNGU |
|---|---|---|
| Number of holdings | 15 (8 core + 7 by volume) | 10 |
| Weight per holding | About 6.67% | 10% |
| Underlying index | Solactive FANG Innovation Index | NYSE FANG+ Index |
| Volume and spreads | Thinner volume | Higher volume, tighter spreads |
| 2022 bear market | Steeper decline than FNGU | Shallower decline than BULZ |
| 2023 recovery | Gains diluted per name | Outperformed BULZ |
Read the table column by column and the longer lineup stops looking like an advantage. In the 2022 drawdown the extra names offered no shelter, and in the 2023 rally the thinner weights trimmed the upside. The point when comparing these two is to avoid reading a larger holding count as diversification.
Does Holding Both Make Sense?
There is almost no rational case for holding FNGU and BULZ simultaneously. Their constituents largely overlap: as of late July 2026, all 10 FNGU stocks are also in BULZ. Holding both effectively overweights FNGU's constituents while allocating a small amount to the 5 names unique to BULZ.
If you want to dilute FNGU's concentration, simply hold BULZ alone. If you want maximum concentration, FNGU alone suffices. A hybrid position adds management complexity without commensurate benefit.
A more worthwhile consideration is combining FNGU (or BULZ) with TQQQ. TQQQ diversifies across 100 stocks, so while correlation with FNGU is high, the degree of intra-sector diversification differs.
BULZ Investment Summary and Caveats
BULZ launched as an 'improved version' of FNGU but is not necessarily superior. Whether additional stocks function as diversification depends on correlation structure, and within the technology sector, diversification is limited.
A rational approach is to first consider whether TQQQ suffices, then FNGU if you want more concentration, and finally BULZ if you want broader innovation coverage. This stepwise evaluation prevents unnecessary complexity.
Both products share the ETN structure and issuer risk. Leverage times concentration times credit risk creates a triple-risk profile. Understanding all three and strictly managing position size is essential.