Notable ETF Filings Recap: April 2024

Defiance 2x Ether Strategy ETF

Barely four months after the launch of spot Bitcoin ETFs, ProShares made waves with a pair of 2x leveraged long and short ETFs tracking spot Bitcoin.

While the regulatory landscape is still shaping up for spot Ethereum ETFs, with their approval still pending by the SEC, futures-based ETF strategies for Ethereum are available and continue to evolve.

In this vein, Defiance, already known for their zero days to expiration (0DTE) options selling ETFs, has filed to launch a 2x Ethereum futures ETF.

This prospective ETF aims to track twice the daily return of the CF Rolling CME Ether Futures Index. Details such as the ticker and expense ratio are yet to be determined, though I anticipate the expense ratio might be high, around the 0.95% range.

What's the utility of such an ETF? Primarily, it serves as a trading tool. For those more risk-averse or looking for a capital-efficient way to gain exposure to Ethereum, this ETF offers a strategic avenue.

 For instance, a 10% allocation to this ETF would result in a 20% notional exposure to Ethereum, providing significant leverage without the need to commit a large amount of capital upfront.

KraneShares Artificial Intelligence ETF

According to the ETF Central screener, there are currently 10 AI-themed ETFs available, and we may soon see an eleventh join the ranks.

KraneShares, widely recognized for their Chinese equity ETFs, has recently filed a prospectus for the KraneShares Artificial Intelligence ETF. This new addition aims to be a passive ETF, tracking the Solactive AI Select Index.

This index is a market-cap weighted benchmark that tracks AI-related securities from developed countries, fitting the appropriate AI-related FactSet Revere Business Industry Classification System categories.

The uniqueness of this ETF lies in its methodology for stock inclusion. Each stock within the index is assigned a proprietary "AI Exposure Score" ranging from 1 to 5 on a quarterly basis and categorized into one of three segments: AI Applications, AI Hardware, or AI Infrastructure.

To be eligible for inclusion in the index, a stock must score a 3 or higher. However, ultimately, only the top 15-20 stocks from each category are included. Each category is limited to a 40% maximum weight, and each security is weighted by its AI exposure score and market cap, subject to a 10% cap per security.

Notably, this ETF also stands out for its ability to invest in the securities of private companies that have exposure to AI businesses, offering investors a unique opportunity to gain exposure to cutting-edge AI ventures that are not yet public.

iShares U.S. Manufacturing ETF

iShares, known for its robust lineup of industry-specific funds, already offers popular options like the iShares U.S. Medical Devices ETF (

In a timely response to the ongoing reshoring initiatives catalyzed by the Inflation Reduction Act and CHIPS Act, iShares plans to launch the iShares U.S. Manufacturing ETF.

This ETF will specifically target the S&P U.S. Manufacturing Select Index, which includes companies involved in consumer vehicles and parts, electronic components, and semiconductor manufacturing, among others.

It incorporates a screening process to ensure that eligible companies derive a significant portion of their revenues domestically: 50% for those in industrial manufacturing and consumer vehicles and parts, and 25% for those in electronic components and manufacturing.

This ETF will also be market cap weighted, incorporating small, mid, and large-cap stocks with a minimum market cap requirement of $2 billion. It features a 4% cap on individual securities and a 15% cap on certain categories to maintain diversification and manage concentration risks.

While the fees are yet to be determined, I anticipate them to be around 0.4%, aligning with the cost structure of other iShares industry-specific ETFs.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.