Founder-Led 2x Daily ETF (FDRX)

Overview

FDRX is an investment fund that aims to deliver double the daily performance of the Founder-Led Index. This specific index is composed of 50 publicly traded companies in the United States, each having at least one original founder in a key executive position. The fund utilizes a variety of financial instruments to achieve its investment goals, including derivatives such as total return swaps and equity index futures, along with direct long positions in the index constituents when such strategies are operationally efficient. In addition to these investment strategies, the fund also maintains liquid assets in the form of cash and cash equivalents for effective portfolio management, liquidity needs, and as collateral in its trading activities.

It is important to note that FDRX resets its leveraged exposure on a daily basis, which can lead to performance discrepancies over longer time periods compared to the expected 2x cumulative return of the index. These discrepancies arise due to the effects of daily compounding as well as market volatility impacting return calculations. The index itself is diverse in terms of market capitalization, incorporating companies of varying sizes but capping individual company weights at 10% within the portfolio. Moreover, the index undergoes reconstitution and rebalancing quarterly, specifically on the third Friday of March, June, September, and December, ensuring that it accurately reflects the current landscape of founder-led enterprises.

Products and Services

• 2x Daily Performance Fund:

  This fund aims to replicate 2x the daily performance of the Founder-Led Index. The fund's use of derivatives and long positions strategically positions it to pursue amplified returns aligned with the index's movement throughout each trading day.

• Derivatives Trading:

  The fund actively employs a range of derivatives including total return swaps and equity index futures as part of its investment strategy. This approach allows for greater flexibility and leverage in achieving the desired exposure and performance outcomes.

• Asset Liquidity Management:

  FDRX maintains a portion of its portfolio in cash and cash equivalents, ensuring that it has sufficient liquidity for operational efficiency, portfolio adjustments, and as collateral for derivatives trading endeavors.

• Rebalancing and Reconstitution:

  The index is systematically rebalanced and reconstituted every quarter, allowing the fund to adapt to market changes and reflect the evolving nature of the participating founder-led companies. This process is designed to maintain alignment with key market developments and trends.