Simplify Asset Management announced the launch of the Simplify Opportunistic Income ETF (NYSE Arca: CRDT). The actively managed opportunistic credit ETF focuses on security selection within the high yield, investment-grade, and distressed debt universes.
Asterozoa Capital Management, an alternatives asset manager with expertise in credit and fixed income derivatives, will subadvise CRDT. The fund’s management team will deploy a multi-step investment process combining macroeconomic, quantitative, and fundamental research to seek current income. The fund’s secondary objective is to achieve long-term capital appreciation.
Additionally, CRDT will employ a dynamic macro hedging overlay to help mitigate drawdowns related to interest rate and credit sensitivities. This will typically come in the forms of interest rate swaps, U.S. Treasury futures, and CDX.
Finding Income and Growth Opportunities With Active Management
Simplify’s CIO and co-founder David Berns said that the “ongoing volatility” within fixed income “presents a host of challenges.” Risks “can emerge with little to no warning and have a hugely destructive impact on an unhedged, passive bond portfolio.”
So, active management can identify “opportunities for income and growth” while “also minimizing risks,” Berns said. He added that the fund offers investors “a true hedge fund-like strategy powered by active security selection.” However, CRDT has “no K-1s, lockups or high fees, which are so often associated with this kind of approach.”
“With CRDT, we believe we’re providing a significant upgrade for investors seeking effective current income solutions,” Berns added.
The launch of CRDT soon follows the listing of the Simplify Market Neutral Equity Long/Short ETF (EQLS). Launched this month, EQLS uses a machine learning stock selection model to deliver an equity long/short portfolio.
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