Simplify Asset Management has launched the Simplify Multi-QIS Alternative ETF (NYSE Arca: QIS). The new ETF invests in a diversified portfolio of third-party quantitative investment strategies across equities, interest rates, commodities, and currencies.
The QIS approach starts with Simplify evaluating thousands of quantitative strategies managed by the biggest investment banks. It then narrows that universe down to the few hundred with the most compelling risk-adjusted return characteristics.
To pare the list down even further, Simplify then conducts a quantitative and qualitative review of each third-party provider’s strategy. It ultimately arrives at a collection of 10–20 strategies. These strategies seek to achieve positive returns and mitigate asset class and single-strategy risks.
A Must-Have Strategy Amidst a Range of Risks
Simplify’s CIO and co-founder David Berns called quant-driven strategies “a must-have… amidst a range of risks” and volatility. Yet the question becomes which strategies will provide differentiated return premia with low correlations to traditional equity and bond exposures. The necessary research requires a team of quants to measure and gauge quant performance and performance drivers. That’s where QIS comes in.
Berns added that QIS “represents a major step forward in the evolution of the alternative ETF category.”
“Simplify has successfully brought institutional expertise into the ETF industry in recent years,” said VettaFi’s head of research Todd Rosenbluth. “It’s great to see them provide more tools for advisors in an accessible format.”
Simplify has been on a roll launching new ETFs. Last month, the firm launched the actively managed opportunistic credit ETF, the Simplify Opportunistic Income ETF (CRDT). Simplify also launched the machine learning fund, the Simplify Market Neutral Equity Long/Short ETF (EQLS), in June.
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