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Simplify Announces Launch of the Simplify Managed Futures Strategy ETF (CTA)

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New fund aims to provide investors with a systematic long/short managed futures strategy designed for absolute return and portfolio diversification; fund allocates across four underlying models designed by commodity trading veterans Altis Partners

NEW YORK, March 08, 2022--(BUSINESS WIRE)--Simplify Asset Management ("Simplify"), an innovative provider of Exchange Traded Funds ("ETFs") designed to solve today’s most pressing portfolio construction challenges, is today launching its newest ETF, the Simplify Managed Futures Strategy ETF (NYSE Arca: CTA).

CTA seeks long-term capital appreciation by providing investors with a systematic long/short managed futures strategy, investing across U.S. and Canadian commodities and rates while excluding equity futures in order to ensure low correlations with equity-dominated portfolios. The Fund will allocate across four underlying models, each with a distinct area of focus including ‘price trend,’ ‘mean reversion,’ ‘carry’ and ‘risk-off,’ developed and managed by Altis Partners, a commodity trading advisor with more than 20 years of experience.

"With interest rates near all-time lows and equity valuations growing ever more stretched, investors are searching for sources of absolute return that can simultaneously serve as a portfolio diversifier. Managed futures have long been put forward as just such a potential solution but investors have too often been underwhelmed by typical managed futures strategies’ correlation to equities. That is something we’ve worked to solve with CTA and we’re very pleased to be adding this fund to our growing lineup of innovative ETF solutions," said David Berns, PhD, Chief Investment Officer and Co-Founder with Simplify.

Simplify points to two key portfolio use cases for CTA. First, given the diversified nature of the holdings and the underlying systematic models, the fund seeks to generate consistent positive returns, regardless of the specific market environment at the time. Second, with its focus on low correlation with the broad equity market and downside risk management in risk-off events, CTA can serve as a powerful diversifier within equity-centric portfolios.

"With its low correlation to equities, systematic commodity and rate exposure, and the fact that CTA will not saddle investors with a K-1, we see this new fund as a cornerstone in building one’s overall portfolio," added Michael Green, CFA, Portfolio Manager and Chief Strategist with Simplify.

CTA is the latest addition to Simplify’s growing lineup of innovative and highly differentiated ETFs, which also includes the recently launched Simplify Aggregate Bond PLUS Credit Hedge ETF (AGGH) and Simplify High Yield PLUS Credit Hedge ETF (CDX), the first ETFs that look to provide credit hedges to go along with exposures to investment grade bonds and high yield bonds, respectively; a way to monetize the premium in the VIX futures market via the Simplify Volatility Premium ETF (SVOL); rate-focused choices such as the Simplify Interest Rate Hedge ETF (PFIX); and numerous funds designed to help investors and advisors add the power of convexity to their portfolios, such as the Simplify US Equity PLUS Downside Convexity ETF (SPD), which currently has close to $500 million in asset under management.

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.

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 funds involves risk, including possible loss of principal.

The CTA fund is new and has a limited operating history to evaluate. The fund is actively-managed and subject to the risk that the strategy may not produce the intended results. The fund will also rely on the Futures Adviser’s judgments about the value and potential appreciation of particular securities which if assessed incorrectly could negatively affect the Fund.

The Fund’s use of futures may involve different or greater risks than investing directly in securities and the contract may not correlate perfectly with the underlying asset. These risks include leverage risk which means a small percentage of assets invested in futures can have a disproportionately large impact on the Fund. This risk could cause the Fund to lose more than the principal amount invested. Futures contracts may become mispriced or improperly valued when compared to the adviser’s expectation and may not produce the desired investment results. The Fund’s exposure to futures contracts is subject to risks related to rolling. Extended periods of contango or backwardation can cause significant losses for the Fund. Any short sales of the futures contracts by the fund theoretically involves unlimited loss potential since the market price of securities sold short may continuously increase.

Investments linked to commodity or currency futures contracts including exposure to non-U.S. currencies can be highly volatile affected by market movements, changes in interest rates or factors affecting a particular industry or commodity. Changes in currency exchange rates can be unpredictable or change quickly which will affect the value of the Fund.

Carry: A model that looks to "roll down" bond yield curves and exit positions before maturity to consistently capture the roll.

Convexity: A measure of how the duration of a bond changes in correlation to an interest rate change. The greater the convexity of a bond the greater the exposure of interest rate risk to the portfolio.

Mean Reversion: Designed to help prevent the trend system from becoming excessively positioned in a market that is deemed to be trading over or under its fundamental market value.

Price Trend: Core strategy that forecasts market direction and invests accordingly (both long and short), relying on persistence of price movement to generate returns.

Risk-Off: A model that looks to protect the portfolio from an equity drawdown by quickly buying bonds in weaker equity markets and remaining out of bond in stronger equity markets. This is distinct from a long bond trend signal given its typically shorter forecasting horizon and reliance on equity index signals rather than a bond signal.

Schedule K-1: A federal tax document used to report the income, losses, and dividends of a business’ or financial entity’s partners or an S corporation’s shareholders.

Simplify ETFs are distributed by Foreside Financial Services, LLC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220308005242/en/

Contacts

MEDIA CONTACT:
Chris Sullivan
MacMillan Communications
(212) 473-4442
chris@macmillancom.com

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