Simplify Health Care ETF (PINK US) – Portfolio Construction Methodology

The investment strategy steering the actively managed Simplify Health Care ETF seeks long-term capital appreciation via multi-cap exposure to U.S. health care companies (as defined by GICS), investing at least 80% of assets in the sector and typically holding 80–100 names to balance idea concentration with liquidity. Security selection is fundamental and bottom-up, favoring firms with scalable innovation, durable economics, and credible pipelines or platforms across biotech, medtech, tools, services, and therapeutics; the approach is primarily growth-oriented but can lean to value when valuations become extended. Portfolio construction sizes positions by conviction, liquidity, and idiosyncratic risk, with issuer and sub-industry bands to avoid unintended concentrations. Ongoing risk control emphasizes thesis upkeep, regulatory and clinical milestone mapping, and event risk management. Trims and exits reflect deteriorating fundamentals, adverse risk/reward, dilution from capital raises, or better opportunities, with rebalancing around catalysts and periodic reviews.

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