Two of the six companies in a new Nasdaq fund cannot be bought on any stock exchange. The prospectus has a plan for that, and it involves a swap on a perpetual future on a company whose shares have never traded on an exchange.
MANGOS is the latest acronym to be turned into a product: Meta, Anthropic, NVIDIA, Google, OpenAI and SpaceX. Four of those are listed. Anthropic and OpenAI are, in the prospectus's words, “not publicly traded", and the fund promises to disclose a ticker “if and when" that changes.
Until then, exposure to the private pair comes “through total return swaps that reference perpetual futures on the non-public companies". A perpetual future is a contract with no expiry date, a creature of crypto exchanges, which in this case references a company that no stock exchange has ever quoted. The fund adds that it “will not invest in perpetual futures directly". Instead, it pays a bank to take that exposure.
The rules around this are careful. The private names are capped at 15% of net assets in aggregate. When one of them floats, the fund limits it to 10% on the day of the IPO and for two days afterwards, then moves it to roughly equal weight with the other listed names. The listed four are equally weighted, mostly through swaps and options. The fee is 0.99%.
The same filing registers a 2X Long, a 2X Short and a 1X Short MANGOS Daily ETF (MGOX, MGOZ and MGOQ). Their underlying security is MGOL itself. That is daily leverage on a fund that holds a swap on a future on a company with no listed shares.
The new 4x gold product in London does not reference gold. According to GraniteShares' own product pages, it seeks four times the daily performance of SPDR Gold Shares (GLD), an American ETF. The silver product references iShares Silver Trust (SLV). The crude oil product references United States Oil Fund (USO).
So a London investor buying 4XAU gets four times the daily move of a New York trust whose bullion sits in a London vault. The gold never leaves the city. The exposure goes to America and back, via a swap with Natixis and an Irish-domiciled issuer, and is quadrupled on the way.
GraniteShares' product list describes this one as “1x long exposure to NVIDIA Corp". The strategy description on the same website describes something else.
Each week, the reference index sells two Nvidia put options at 95% of the share price and buys two at 90%. The net premium funds monthly distributions. A weekly fall of up to 5% is absorbed. Between 5% and 10%, in the issuer's own words, the index has “2x leveraged exposure to downside". Beyond 10%, capital is partially protected. Nothing in that description rises when Nvidia does.
That is a reasonable way to sell weekly volatility, and a peculiar thing to call long exposure. The London admission notice classifies the product as a debt security with a maturity fifty years away, which is a long time to keep selling puts one week at a time.
Most indices have a screen designed to keep out companies that spend far more than they earn. This one has an entrance reserved for them.
Under the “development-stage" test, a company qualifies if its total costs and expenses are more than four times its revenue, it is developing its own reactor design, and it has either a government contract or a granted patent. It must then satisfy at least one further condition, one of which is meeting four of five milestones. A signed memorandum of understanding or letter of intent with a utility or data-centre operator counts as a “commercial commitment".
The weighting is just as particular. The index targets up to 15 constituents. The two companies with the largest reactor revenue, among those worth at least $3 billion, are designated “anchors" and held at 20% each. That puts 40% of the fund in two names before anyone has built a small modular reactor at scale. The fund is actively managed, using the index as its reference, gains much of its exposure through swaps and charges 0.75%.
The GLP-1 trade now has a fund that includes skincare.
The VettaFi Peptide Index covers four segments: therapeutics, manufacturing and delivery devices, nutraceuticals (collagen supplements and sports nutrition) and cosmeceuticals. A “Core" tranche of companies with at least half their revenue or research pipeline in peptides gets 80% of the weight. A “Diversified" tranche gets the other 20%, and one route in is for a company that earns less than 10% of its revenue from peptides but holds a top-three global market share in one of the segments.
Greg King, REX's chief executive, puts the pitch simply: “Investors have spent three years expressing the GLP-1 trade through two stocks." PEPT holds 36 stocks, a little over half of them American, with South Korea the only emerging market allowed. The fee is 0.65%.
The most interesting thing about this fund is how it was assembled. Its starting portfolio is “expected to be acquired through in-kind contributions", structured to qualify as tax-deferred exchanges under Section 351 of the US tax code. Investors hand over holdings they already own and receive fund shares, without triggering a sale.
If some of those contributions are other ETFs, the prospectus says the fund “generally expects to hold such ETFs" as long-term investments. That is where the 0.02% of acquired fund fees comes from, on top of a 0.15% management fee, for a total of 0.17%.
The strategy is the familiar Avantis one: US companies of all sizes, tilted towards those that are smaller, cheaper and more profitable, measured against the Russell 3000. Two housekeeping notes. The launch announcement said NYSE, the prospectus says NYSE Arca, and some of the rows for AVUC in our listing data arrived with no ISIN at all.