Our fuse is both though. It will go off on contact with an enemy plane. Lazer, Ely, Rugby, and Fork all landed direct hits on bombers we were flying in the DA and wiped out either 2 or 3 bombers in the formation. This was from a range of 700-800 yards.
I, on the other hand, was shooting from 1.2-1.4k out (and missing every single time lol). I managed to get a few 'prox' hits as the warhead went off, I think explodes after it travels 1.3 to 1.4k. It seems to be a lot more deadly if it actually hits though (explosion-wise)- we saw 5-6 direct hits that killed multiple bombers, as opposed to my 2-3 hits where it blew up near a bomber but did not kill it.