Simplify Asset Management has launched two new income-focused ETFs designed to enhance portfolio yield without significant credit or duration exposure. The Simplify Stable Income ETF (NYSE Arca: BUCK) and the Simplify Enhanced Income ETF (NYSE Arca: HIGH) begin trading today on the 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 indexes, layering this option writing on top of short-dated Treasuries in a highly risk-controlled manner.
HIGH, meanwhile, is 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.
“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,” said Paul Kim, co-founder and CEO of Simplify, in a news release. “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.”
Added Kim: “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.”
BUCK and HIGH join a Simplify ETF lineup that includes such yield- and fixed income-focused alternatives as the Simplify Interest Rate Hedge ETF (PFIX), the Simplify Risk Parity Treasury ETF (TYA), and the Simplify High Yield PLUS Credit Hedge ETF (CDX).
“Advisors have been seeking out alternative products to generate income in the current rising rate environment,” said Todd Rosenbluth, head of research at VettaFi. “These new Simplify ETFs are a nice addition to their suite of options- based products that offer risk-managed income.”
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