Defiance, a leader provider of options and income ETFs, today
announced the launch of TRES, the Defiance Treasury Alternative
Yield ETF (TRES). The fund will offer exposure to treasuries with
an options overlay intended to maximize yield. TRES will be
actively managed by Zega Financial. The ETF will seek to distribute
dividends monthly.
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the full release here:
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Defiance Expands ETF Option-Income
Offerings with the Treasury Alternative Yield ETF (TRES) (Graphic:
Business Wire)
Identifying that the options market typically misrepresents
expected moves in bond-based ETFs, Zega and Defiance aim to
capitalize on that mispricing of options and create a higher set of
returns than projected by options markets. The overlay, which will
primarily be net long volatility on the underlying ETFs, creates
participation on both bullish and bearish moves in selected
exchange-traded Treasury funds (“Treasury ETFs”). TRES will
additionally offset the time decay of long options with option
selling tactics to generate income, which may in turn be passed on
to investors.
“TRES brings together the stability and predictability of
short-term US treasuries, with a tactical options strategy that
aims to harvest the volatility of treasury-based ETFs,” said Jay
Pestrichelli, founder and CEO of Zega. “We’re excited to be
partnering our expertise in volatility with Defiance’s deep
experience in ETFs.”
Defiance’s suite of income-focused ETFs includes the 2023
launches of the first 0DTE Enhanced Income ETFs, JEPY, QQQY, and
IWMY.
Sylvia Jablonski, CEO at Defiance, added “We’re thrilled to be
expanding our suite of income focused ETFs that will help investors
face turbulent markets. With Zega and TRES, we’re providing an
investment strategy that will seek to allow investors to maximize
their yield with the security of treasuries.”
About Defiance ETFs
Founded in 2018, Defiance stands as a leading ETF sponsor
dedicated to income and thematic investing. Our actively managed
options ETFs are designed to enhance income while our suite of
first-mover thematic ETFs empower investors to express targeted
views on dynamic sectors leading the way in disruptive innovations,
including artificial intelligence, machine learning, quantum
computing, 5G, hydrogen energy, and electric vehicles.
Important Disclosures
TRES Disclosure: Defiance ETFs LLC is the ETF sponsor. The
Fund’s investment adviser is Toroso Investments, LLC (“Toroso” or
the “Adviser”). The investment sub-adviser is ZEGA Financial, LLC
(“ZEGA” or the “Sub-Adviser”).
Fund holdings and sector allocations are subject to change at
any time and should not be considered recommendations to buy or
sell any security.
The Funds' investment objectives, risks, charges, and expenses
must be considered carefully before investing. The prospectus
contain this and other important information about the investment
company. Please read carefully before investing. A hard copy of the
prospectuses can be requested by calling 833.333.9383.
Past performance is no guarantee of future results. High ratings
does not assure favorable performance.
Investing involves risk. Principal loss is possible. As an
ETF, the funds may trade at a premium or discount to NAV. Shares of
any ETF are bought and sold at market price (not NAV) and are not
individually redeemed from the Fund. A portfolio concentrated in a
single industry or country, may be subject to a higher degree of
risk.
There is no guarantee that the Fund’s investment strategy will
be properly implemented, and an investor may lose some or all of
its investment.
None of the Fund, the Trust, the Adviser, the Sub-Adviser, or
their respective affiliates makes any representation to you as to
the performance of the Index. THE FUND, TRUST, ADVISER, AND
SUB-ADVISER ARE NOT AFFILIATED WITH, NOR ENDORSED BY, THE
INDEX.
Liquidity Risk: Liquidity risk exists when particular
investments of the Fund would be difficult to purchase or sell,
possibly preventing the Fund from selling such illiquid securities
at an advantageous time or price, or possibly requiring the Fund to
dispose of other investments at unfavorable times or prices in
order to satisfy its obligations.
New Fund Risk: The Fund is a recently organized
management investment company with no operating history. As a
result, prospective investors do not have a track record or history
on which to base their investment decisions.
Non-Diversification Risk: The Fund is classified as
“non-diversified,” which means the Fund may invest a larger
percentage of its assets in the securities of a smaller number of
issuers than a diversified fund. The Fund will generally have up to
15 credit spreads at any given time, with up to 25% exposure to a
single equity index credit spread. Investment in a limited number
of equity indexes exposes the Fund to greater market risk and
potential losses than if its assets were diversified among a
greater number of indexes.
Written Options Risk: The Fund will incur a loss as a
result of writing (selling) options (also referred to as a short
position) if the price of the written option instrument increases
in value between the date the Fund writes the option and the date
on which the Fund purchases an offsetting position. The Fund’s
losses are potentially large in a written put transaction and
potentially unlimited in a written call transaction.). Because of
the fund’s strategy of coupling written and purchased puts and call
options with the same expiration date and different strike prices,
the Fund expects that maximum potential loss for the Fund for any
given credit spread is equal to the difference between the strike
prices minus any net premium received. Nonetheless, because up to
100% of the Fund’s portfolio may be subject to this risk - the
value of an investment in the Fund – could decline significantly
and without warning, including to zero.
Fixed Income Securities Risk: The prices of fixed income
securities respond to economic developments, particularly interest
rate changes, as well as to changes in an issuer’s credit rating or
market perceptions about the creditworthiness of an issuer.
Generally fixed income securities decrease in value if interest
rates rise and increase in value if interest rates fall, and
longer-term and lower rated securities are more volatile than
shorter- term and higher rated securities.
Leveraging Risk: Derivative instruments held by the Fund
involve inherent leverage, whereby small cash deposits allow the
Fund to hold contracts with greater face value, which may magnify
the Fund’s gains or losses. Adverse changes in the value or level
of the underlying asset, reference rate or index can result in loss
of an amount substantially greater than the amount invested in the
derivative. In addition, the use of leverage may cause the Fund to
liquidate portfolio positions when it would not be advantageous to
do so in order to satisfy redemption obligations.
Derivatives Risk: Derivatives include instruments and
contracts that are based on and valued in relation to one or more
underlying securities, financial benchmarks, indices, or other
reference obligations or measures of value. Major types of
derivatives include options. Depending on how the Fund uses
derivatives and the relationship between the market value of the
derivative and the underlying instrument, the use of derivatives
could increase or decrease the Fund’s exposure to the risks of the
underlying instrument. Using derivatives can have a leveraging
effect if the Sub-Adviser is unable to set an appropriate spread
between two options held by the Fund and increase Fund volatility.
In that event, a small investment in derivatives could have a
potentially large impact on the Fund’s performance. Derivatives
transactions can be highly illiquid and difficult to unwind or
value, and changes in the value of a derivative held by the Fund
may not correlate with the value of the underlying instrument or
the Fund’s other investments. Many of the risks applicable to
trading the instruments underlying derivatives are also applicable
to derivatives trading. Financial reform laws have changed many
aspects of financial regulation applicable to derivatives. Once
implemented, new regulations, including margin, clearing, and trade
execution requirements, may make derivatives more costly, may limit
their availability, may present different risks or may otherwise
adversely affect the value or performance of these instruments. The
extent and impact of these regulations are not yet fully known and
may not be known for some time.
Diversification does not ensure a profit nor protect against
loss in a declining market.
Total return represents changes to the NAV and accounts for
distributions from the fund.
Median 30 Day Spread is a calculation of Fund’s median bid-ask
spread, expressed as a percentage rounded to the nearest hundredth,
computed by: identifying the Fund’s national best bid and national
best offer as of the end of each 10 second interval during each
trading day of the last 30 calendar days; dividing the difference
between each such bid and offer by the midpoint of the national
best bid and national best offer; and identifying the median of
those values.
Diversification does not ensure a profit nor protect against
loss in a declining market.
Commissions may be charged on trades.
TRES is distributed by Foreside Fund Services, LLC.
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Frank Taylor (646) 808-3647 defiance@dlpr.com
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