Defiance Unveils Income Generating Oil Fund

The fund would be the first of its kind to use put options on USO.

LucyBrewster310x310
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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: James Rubin

Defiance ETFs, the themes-focused issuer often known for making bold options plays, unveiled its first oil and income focused fund on Friday to address investor demand for a variety of income generating products.

The Defiance Oil Enhanced Options Income ETF (USOY), which is actively managed, uses put options to offer investors income as well as indirect exposure to the United States Oil Fund (USO), the largest pure play oil fund in the United States.

“Traders invested in the commodity could potentially benefit from not only the price of oil, but also the additional premium our fund may achieve through selling slightly in the money puts,” explained Sylvia Jablonski, CEO of Defiance ETFs.

Options ETFs' popularity has surged over the past year, partially due to the success of the $33 billion JPMorgan Premium Income (JEPI), which brought in nearly $13 billion in inflows last year.

Defiance, which was founded in 2018, has nine ETFs trading with about $1.4 billion in assets. The issuer employs strategies such as options and leverage in many of its funds, including the Defiance Nasdaq 100 Enhanced Options Income ETF (QQQY), as well as the Defiance R2000 Enhanced Options Income ETF (IWMY). 

Oil Prices in 2024

Amid geopolitical instability and shortened supply, oil prices climbed earlier in the year, making ETFs in the energy category some of 2024's best performers.

Yet over the past month, the West Texas Intermediate crude oil futures declined about 7%, even as the United States Oil Fund (USO) gained roughly 1%. This disparity could be due to the cost of product remaining high despite the spot price of oil falling, according to reporting from etf.com's Jeff Benjamin.

Jablonski highlighted that with oil and energy down over 2023, ETFs in the sector are still “proving to have investment return potential in ’24,” she said.

The largest Defiance ETF is the Defiance Next Gen Connectivity ETF (FIVG), which has $542.3 million in assets under management.

Contact Lucy Brewster at [email protected].

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.