Simplify blends US equities and alternatives in latest ETF

Nov 20th, 2023 | By | Category: Alternatives / Multi-Asset

Simplify Asset Management has launched a new ETF combining core US equities exposure with a diverse array of quantitative investment strategies.

David Berns, co-Founder and Chief Investment Officer at Simplify Asset Management

David Berns, co-founder and Chief Investment Officer at Simplify Asset Management.

The Simplify US Equity PLUS QIS ETF (SPQ US) has been listed on NYSE Arca with an expense ratio of 1.00%.

The fund embodies capital efficiency, allowing investors to integrate an alternative investment strategy into their portfolios without reducing their equity exposure.

SPQ’s primary equity segment consists of a 100% allocation to passive third-party ETFs and equity futures that deliver broad exposure to the US stock market.

In addition to its core equity holdings, SPQ also delivers an approximate 50% allocation to the $100 million Simplify Multi-QIS Alternative ETF (QIS US).

Launched in mid-2023, QIS is composed of an array of ten to 20 top-tier, quant-driven strategies spanning various asset classes including equities, interest rates, commodities, and currencies.

The selection process for QIS is rigorous. Starting from a pool of over 1,500 strategies sourced from premier investment banks, Simplify whittles down the selection universe to a few hundred with standout risk-adjusted return characteristics. Following this, a thorough quantitative and qualitative assessment further narrows the selection to an optimized collection of strategies, implemented through total return swaps.

The strategies are marked by their diversity in return drivers, including carry, volatility, technical, and liquidity factors. Collectively, QIS’s portfolio contains significant potential for absolute returns while minimizing exposure to single-asset class and single-strategy risks.

According to Simplify, by combining a multi-quantitative overlay to core US equities exposure, SPQ can serve as a potent diversifier for traditional portfolios, offering a blend of high absolute and risk-adjusted returns compared to a pure US equities investment.

David Berns, co-founder and Chief Investment Officer of Simplify Asset Management, commented: “Our intent with SPQ is to boost both absolute and risk-adjusted returns of a standard equity investment. We’ve responded to the demand from investors and advisors for an uncomplicated route to alternative returns without diminishing their equity exposure, and SPQ is our innovative response.”

SPQ is a part of Simplify’s broader suite of alternative ETF offerings which also features the Simplify Volatility Premium ETF (SVOL US), Simplify Interest Rate Hedge ETF (PFIX US), and Simplify Market Neutral Equity Long/Short ETF (EQLS US).

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