Simplify Asset Management has announced the launch of the Simplify Short Term Treasury Futures Strategy ETF (TUA).
TUA is designed with the twin goals of capital and yield curve efficiency, seeking to target the duration of the ICE 10-Year US Treasury Index by investing in Treasuries and Treasury futures at the short end of the curve.
The firm writes that the fund is similar in strategy and approach to the Simplify Risk Parity Treasury ETF (TYA), which Simplify launched in September 2021; with the key difference being that TUA focuses on Treasuries and Treasury futures at the short end of the curve, rather than the intermediate, though Simplify notes that TUA can potentially create more efficient intermediate duration exposure by capitalising on favourable roll yields at the short end of the Treasury curve.
“We’re pleased to be adding TUA to our fund lineup and see a number of key use cases, particularly in the current environment,” says David Berns, Ph.D., CIO and Co-Founder with Simplify. “Given its levered exposure to short-term Treasuries, TUA can be used to gain short duration exposure with only a fraction of the capital required by an unlevered position, significantly increasing capital efficiency. It can also be used as the building block in a variety of innovative portfolio solutions, including risk parity.”
