Defiance Global Foundries ETF

The Defiance Global Foundries ETF (Nasdaq: AIFR) seeks to track the MarketVector Global Foundries Index and provides targeted exposure to publicly listed companies that are principally engaged in semiconductor foundry solutions and related services: the manufacturers that fabricate chips designed by other companies.

Nearly every advanced chip powering artificial intelligence is manufactured by a foundry. The companies designing AI accelerators, custom silicon, and networking chips generally do not own leading-edge fabs; they contract production to a small group of manufacturers led by TSMC, which accounted for roughly 72% of global foundry revenue in the first quarter of 2026, according to TrendForce. As AI demand has broadened from GPUs into custom accelerators, networking silicon, and the power management chips built on mature nodes, capacity has tightened across the industry. The world’s ten largest foundries generated a record $169.5 billion in revenue in 2025, set another quarterly record in the first quarter of 2026, and have begun announcing wafer price increases for the second half of the year.

In short, AIFR targets the layer the entire chip industry runs through: the fabs that turn designs into silicon.

Why AIFR?

The bottleneck of the AI buildout. Chips, memory, networking, and power have each had their moment in the AI trade. AIFR offers focused exposure to the manufacturing capacity that every one of them depends on, at a time when that capacity is the scarcest input in the supply chain.

Pricing power is moving to the fabs. With utilization high from the leading edge down to mature nodes, foundries across the industry have signaled wafer price increases for the second half of 2026. AIFR is designed to hold the companies that own the capacity customers are competing for.

Pure-plays and giants, one index. The Index admits companies that derive at least 50% of revenue from foundry activities or generate at least $2.0 billion in annual foundry revenue, combining dedicated foundries with the diversified semiconductor leaders building foundry businesses of their own. Ten constituents, weighted by free-float market capitalization with a 20% cap, rebalanced quarterly.

Investment Objective

The Defiance Global Foundries ETF (the “Fund”) seeks to track the performance, before fees and expenses, of the MarketVector Global Foundries Index (the “Index”).

The Index

The MarketVector Global Foundries Index is owned and administered by MarketVector Indexes GmbH and calculated by Solactive AG. The Index is rules based and designed to track the performance of publicly listed companies that are principally engaged in semiconductor foundry solutions and related services, drawn from a global universe.

To be eligible, a company must derive at least 50% of its revenue from semiconductor foundry-related activities or generate at least $2.0 billion in annual revenue from those activities in its most recently completed fiscal year. Eligible activities include semiconductor wafer fabrication; advanced-node, mature-node, and specialty-node manufacturing; logic, analog, mixed-signal, power, radio frequency, and embedded wafer production; specialty foundry services for microelectromechanical systems, image sensors, photonics, display drivers, and other application-specific semiconductors; mask, process, and manufacturing services tied to wafer foundry production; and related foundry support services.

Companies must also meet minimum size and liquidity requirements for initial inclusion, including a free float of at least 10%, a market capitalization above $1.0 billion, and a three-month average daily traded value of at least $1.0 million. The Index targets 10 constituents, ranked by free-float market capitalization. Constituents are weighted by free-float market capitalization, subject to a 20% cap per constituent at each rebalance, with excess weight redistributed proportionally. The Index is reconstituted and rebalanced quarterly in March, June, September, and December, with provisions to add qualifying IPOs and spin-offs on an accelerated basis. The Index launched on July 20, 2026.

Under normal circumstances, the Fund invests at least 80% of its net assets in investments that provide exposure to the component securities of the Index, including the securities themselves, depositary receipts, and derivative instruments such as total return swaps and listed options. The Fund generally uses a replication strategy and may also invest up to 15% of its net assets in private companies engaged in semiconductor foundry services.

MarketVector Global Foundries Index Holdings