Simplify Asset Management has unveiled a new suite of ETF-driven model portfolios built using the firm’s line-up of their funds.
In total, Simplify is today launching four model portfolios, with a variety of underlying fixed income and equity exposures available to financial professionals.
The four portfolios cover the risk/return spectrum, ranging from Conservative to Moderate to Growth, with a fourth approach focused on income generation.
For the fixed income sleeves of the various portfolios, Simplify starts with a core exposure to the firm’s Simplify Risk Parity Treasury ETF (TYA), and then layers on allocations to the Simplify High Yield PLUS Credit Hedge ETF (CDX), Simplify Volatility Premium ETF (SVOL) and the Simplify Interest Rate Hedge ETF (PFIX).
“TYA allows us to create the duration exposure of a typical fixed income portfolio at a fraction of the usual cost. CDX provides an opportunity for enhanced income with credit exposure that includes tail hedges, while SVOL allows us to deploy the equity volatility premium as a dominant risk-adjusted source of income. Finally, PFIX aims to create a hedge against rising rates when starting in a low yield environment,” says David Berns, PhD, CIO & Co-Founder with Simplify. “Working with these building blocks, we are able to create and manage a powerful new set of tools that provide a modernized approach to fixed income.”
Within the equity sleeves, the Simplify US Equity PLUS Downside Convexity ETF (SPD) and/or other tail hedged equity strategies from Simplify provide a base upon which allocations to the Simplify US Equity PLUS Upside Convexity ETF (SPUC), Simplify Hedged Equity ETF (HEQT) and Simplify US Equity PLUS GBTC ETF (SPBC) are added to provide what the firm believes to be a more modernised approach to navigating equity exposure.
“Our mission at Simplify is not just to build the industry’s leading suite of ETFs focused on convexity, tail risk hedging and volatility premiums, it is to help empower investors to put these approaches to work in efficient and effective ways that are tailored to their specific needs and risk tolerances,” says Berns. “We’re thrilled to finally roll out our model portfolios, showcasing the precise role that each ETF exposure we have launched since inception plays in portfolios, and giving allocators an explicit yet simple guide to utilising our novel suite of ETFs.”