NEW YORK--(BUSINESS WIRE)--Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), is today announcing the launch of the Simplify Market Neutral Equity Long/Short ETF (NYSE Arca: EQLS).
The Fund is a first-of-its-kind ETF, utilizing a proprietary machine learning stock selection model to deliver a modern take on the equity long/short portfolio.
EQLS invests in baskets of global equities, primarily through total return swaps that provide the returns, long or short, of a basket of common stocks. The companies in these baskets are selected using a multi-factor quantitative ranking system powered by machine learning. The swaps provide the fund with equity exposure of approximately 200% long the stocks of companies exhibiting positive performance factors, and 200% short the stocks of companies exhibiting negative performance factors.
EQLS is also designed to have a dynamic de-leveraging strategy to help avoid severe drawdowns, an additional key point of differentiation versus other market neutral approaches.
“Market neutral strategies, which seek to profit during both rising and falling markets, should provide significant diversification benefits and compelling return profiles for investors but too often the category has disappointed, missing significant moves to the upside and being slow to react to downward pressures. With EQLS, we’ve sought to update how an equity long/short portfolio can be constructed and managed,” said David Berns, PhD, Simplify’s Chief Investment Officer and Cofounder.
“Advancements in machine learning allow for entirely new approaches to detecting patterns and translating those patterns into formulas used to forecast securities prices. That technology, coupled with the use of swaps, allows EQLS to stay true to its mission and to do so with greater capital efficiency and an added income component via gains on the swaps. We’re very pleased to be bringing this new ETF to market and look forward to discussing the challenges that EQLS can help to solve,” added Berns.
More information on EQLS can be found here.
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.
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DEFINITIONS:
Options: An option is a contract that gives the buyer the right to either buy (in the case of a call option) or sell (in the case of a put option) an underlying asset at a pre-determined price ("strike") by a specific date ("expiry"). An "outright" is another name for a single option leg. A "spread" is when options are bought at one strike and an equal amount of options are sold at a different strike, all at the same expiry.
Swap: An agreement between two parties to exchange sequences of cash flows for a set period of time. Usually, at the time the contract is initiated, at least one of these series of cash flows is determined by a random or uncertain variable, such as an interest rate, foreign exchange rate, equity price, or commodity price.
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 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 earnings and prospects of small and medium-sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. Small and medium-sized companies normally have a lower trading volume than larger companies, which may tend to make their market price fall more disproportionately than larger companies in response to selling pressures and may have limited markets, product lines, or financial resources and lack management experience.
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.
Foreign Investment Risk. The Fund may invest in securities domiciled in countries outside the U.S. that may experience more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. Diversification does not assure a profit.
Simplify ETFs are distributed by Foreside Financial Services, LLC. Foreside and Simplify are not related.
