Simplify Launches No K-1 Actively Managed Commodity Strategy ETF (HARD)
Fund is designed to be a long-only commodity replacement, while still providing the enhancements of a systematic long/short managed futures strategy
Simplify Asset Management ("Simplify"), an innovative provider of Exchange Traded Funds ("ETFs"), is today announcing the launch of the Simplify Commodities Strategy No K-1 ETF (NYSE:HARD).
HARD is designed to play a number of key roles in an investor's portfolio, including as both a core commodity holding and as an inflation hedging vehicle.
"The role that commodities can play in hedging portfolios against strong inflation has long been understood by investors, but just as well understood is the way in which long-only commodity strategies tend to underperform over long time horizons. With HARD, we've designed a means by which investors can access commodity exposure for both the short- and the long-term, with the potential to perform well during periods of inflation as well as in more typical market environments," said David Berns, PhD, Simplify's Chief Investment Officer and Cofounder.
HARD is actively managed by the team at Altis Partners, a commodity trading advisor with more than 20 years of experience, and has been built around two underlying models of ‘price trend' and ‘fundamental reversion,' which balance one another while at the same time long/short forecasting models naturally optimize curve position for contango and/or backwardation. Commodity futures included in the strategy include crude oil, RBOB, heating oil, natural gas, copper, gold, silver, corn, wheat, soybeans, and soybean oil.
"We're pleased to be launching HARD, as we see this fund meeting two important needs for investors and advisors: access to an enhanced core commodity exposure and a powerful inflation hedge," added David. "Those aspects, in combination with the fact that the fund will never deliver a K-1 have us very much looking forward to educating the marketplace about this highly differentiated approach."
HARD joins the Simplify Managed Futures Strategy ETF (CTA) among the firm's commodity-focused offerings.
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 fund involves risk, including possible loss of principal. Past performance does not guarantee future results.
The 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.
Repurchase Agreement Risk. The Fund's investment in repurchase agreements may be subject to market and credit risk with respect to the collateral securing the repurchase agreements.
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.
Simplify ETFs are distributed by Foreside Financial Services, LLC. Foreside and Simplify are not related.
Definitions
Backwardation: The pattern of higher futures prices for shorter expiration futures contracts.
Contango: The pattern of higher futures contract prices for longer expiration contracts.
Long/Short Managed Futures: A systematic, rule-based investment strategy that can generally go long or short futures contracts across equities, fixed income, commodities, and foreign-exchange markets.
Market Price: The current price at which shares are bought and sold. Market returns are based upon the last trade price.
Price Trend: Core strategy that forecasts market direction and invests accordingly (both long and short), relying on persistence of price movement to generate returns.
Rolling occurs when the Fund closes out of a Futures Contract as it nears its expiration and replaces it with a contract that has a later expiration.
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.
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