XRPR's Unconventional Structure May Weaken Its Ties to XRP

Rex-Osprey's XRPR ETF has a unique structure that could lead to tracking divergence from XRP prices due to fees, trading costs, and fund structure. On August 24, XRPR held 40.25% of its $56.68 million portfolio in CoinShares Physical XRP ETP, worth $22.87 million. This means that the ETF's fees and trading costs can stack up across two listed products.

CoinShares lists a 1.50% annual fee for its XRP ETP, which, combined with XRPR's 0.75% total annual operating expense ratio, creates an estimated 0.60375 percentage-point annual drag on the fund before changes in allocation, prices, or expenses.

This estimate is not a fixed all-in XRPR fee, as the underlying product's charge is reflected in its own value, while XRPR's 0.75% is the fund's disclosed operating expense figure. The sleeve can also create tracking differences beyond the stated fee due to market frictions such as bid-ask spreads, market depth, and execution prices.