Both funds are designed to enhance portfolio yield without significant credit or duration exposure
Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), is today announcing the launch of its two newest ETFs, the latest addition to the firm’s fast-growing lineup of income-generating solutions.
The Simplify Stable Income ETF (NYSE Arca: BUCK) is the firm’s first cash alternative ETF and is designed to enhance typical yields on cash via an option writing strategy with low correlation to traditional credit and duration exposures. Simplify employs a sophisticated option-writing algorithm to sell spreads on the most liquid global equity indices, layering this option writing on top of short-dated Treasuries in a highly risk-controlled manner.
Launching simultaneously is the Simplify Enhanced Income ETF (NYSE Arca: HIGH), designed as an alternative high yield solution for investors and advisors with a focus on delivering significant income with low correlation to traditional credit and duration exposure. As with BUCK, HIGH is powered by a sophisticated option-writing algorithm that dynamically selects option type, underlier and strikes to generate attractive risk-adjusted returns.
“We are very excited about today’s launch of BUCK and HIGH, two powerful new tools for investors and advisors in their search for yield,” said Paul Kim, CFA, CEO and Co-Founder with Simplify. “Traditional approaches to fixed income have been exposed this year as either under-delivering when it comes to generating income or being highly volatile in the midst of the market chaos that has marked so much of 2022. With BUCK and HIGH, there is an equal focus on income generation and risk management, providing what we believe will be appealing alternatives to cash and high yield bonds, respectively, with the opportunities for boosted yields while managing tail risk.”
BUCK and HIGH join a Simplify ETF lineup that includes numerous first-of-their-kind yield- and fixed income-focused alternatives, including the Simplify Interest Rate Hedge ETF (PFIX), Simplify Risk Parity Treasury ETF (TYA), and Simplify High Yield PLUS Credit Hedge ETF (CDX).
“Income investing is ripe for innovation, and we’re very excited to be adding BUCK and HIGH to our lineup as we continue to educate the investor marketplace about the role that options-driven approaches and other new ways of finding and delivering yield can play in portfolios,” added Kim.
ABOUT SIMPLIFY ASSET MANAGEMENT INC
Simplify Asset Management Inc. is a Registered Investment Adviser founded in 2020 to help advisors tackle the most pressing portfolio challenges with an innovative set of options-based strategies. By accounting for real-world investor needs and market behavior, along with the non-linear power of options, our strategies allow for the tailored portfolio outcomes for which clients are looking. For more information, visit www.simplify.us.
Duration: A measure of the sensitivity of an asset price to movements in yields.
IMPORTANT INFORMATION:
Investors should carefully consider the investment objectives, risks, charges, and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF's prospectus containing this and other important information, please call (855) 772-8488, or visit SimplifyETFs.com. Please read the prospectus carefully before you invest.
An investment in the fund involves risk, including possible loss of principal.
The fund is actively managed and is subject to the risk that the strategy may not produce the intended results. The fund is new and has a limited operating history to evaluate.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund's gains or losses. The Fund's investment in fixed income securities is subject to credit risk (the debtor may default) and prepayment risk (an obligation paid early) which could cause its share price and total return to be reduced. Typically, as interest rates rise the value of bond prices will decline and the fund could lose value.
The Fund invests in ETFs (Exchange-Traded Funds) and is therefore subject to the same risks as the underlying securities in which the ETF invests as well as entails higher expenses than if invested into the underlying ETF directly.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
Duration: A measure of the sensitivity of an asset price to movements in yields.
Simplify ETFs are distributed by Foreside Financial Services, LLC.
© 2022 Simplify ETFs. All rights reserved.
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Contacts
MEDIA CONTACT:
Chris Sullivan
MacMillan Communications
(212) 473-4442
chris@macmillancom.com