On Tuesday, Defiance ETFs stepped into the uranium market with the launch of the Defiance Daily Target 2x Long Uranium ETF (URAX ).
The actively managed URAX comes with a net expense ratio of 0.95%. The exchange traded fund’s goal is to double the percentage change in the share price of the Global X Uranium ETF (URA ).
The Global X Uranium ETF is one of the largest uranium ETFs on the market. It has roughly $3.6 billion in assets under management. URA primarily invests in companies that participate in the uranium industry. That can be via mining, refining, equipment manufacturing, and exploration, among others.
Swap Agreement Strategy
In order for URAX to earn 200% of the daily percentage change within URA, the fund uses swap agreements. These swap agreements can range from lasting one day to upward of over a year.
URAX allocates at least 80% of its exposure to instruments that the fund managers believe can perform double the daily performance of URA. About 40%-60% of the fund’s assets are expected to be posted as collateral for the swap agreements.
The fund prospectus adds that URAX can hold a variety of assets to serve as collateral for fund swap agreements. These assets can include U.S government securities, short-term bond ETFs, money market funds, and corporate debt securities.
“We are thrilled to introduce URAX, the first leveraged ETF in uranium. This ETF reflects our commitment to providing investors with innovative opportunities to capitalize on emerging trends and disruptive technologies,” noted Defiance ETFs CEO Sylvia Jablonski. “With URAX, traders can now leverage the potential of nuclear energy.”
Defiance ETFs has more than 10 funds listed in the United States. These funds account for over $1.4 billion in assets under management.
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