Simplify launches active healthcare ETF

Feb 16th, 2023 | By | Category: ETF and Index News

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Simplify Asset Management has launched a new actively managed ETF providing exposure to smaller, more speculative companies within the biotech, pharmaceuticals, healthcare technology, and life sciences sectors.

Simplify launches active healthcare ETF

The ETF targets innovative healthcare companies that may have been overlooked by analysts and investors.

The Simplify Propel Opportunities ETF (SURI US) has been listed on NYSE Arca, coming to market with $70 million in initial assets.

The fund is sub-advised by Propel Bio Management, a global venture fund that it says uses deep scientific expertise in healthcare to find promising investment opportunities.

Propel notes that its expertise advantage helps it to identify companies that may have been overlooked by analysts and investors without the proper scientific background and, therefore, may present significant opportunities for capital appreciation.

The ETF will typically target small to mid-cap companies in various stages of maturity including early-stage firms that are conducting clinical trials and may not yet be consistently profitable. Propel ranks the expected returns and risk profile of each potential investment based on the scientific proposition of the issuer, the probability that the science will lead to a product or treatment, and projected profits from each successful product or treatment.

Once target companies have been identified, the ETF may invest in these firms’ common stock, preferred stock, convertible bonds, structured notes, or corporate notes. There is no restriction in terms of issuer capitalization, country of domicile, credit quality, maturity, structure, or issuer type.

Simplify also has an active role in managing the ETF by being responsible for an options strategy overlay based on up to 20% of the fund’s assets. The purpose of the options strategy overlay is primarily to protect against market declines.

The ETF comes with a lofty expense ratio of 2.51%.

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