Simplify funds

I wanted to mention the simplify ETFs. I think they are unique in that they use hedge fund strategies but retail investors can buy them. Some examples, they buy the s and p, and sell some put spreads, so that if the market crashes they still do well. Or they have another one, where they buy own an index and make money if there is high volatility. One more owns the s and p 500, and owns 10% crypto. They rebalance the crypto as it goes up and down in value. There are some other funds like this, but they have not done well. I looked at morningstar’s rating, and they gave them a gold rating. Their highest. There idea is not to make a fortune, but to protect against huge losses.


I wanted to mention the simplify ETFs.

Here’s a little more information.

There are 22 Simplify ETFs. All are relatively recent with inception dates ranging from 9/3/20 to 3/7/22. The first and by far the largest is the Simplify US Equity PLUS Downside Convexity ETF (SPD).

In spite of the fact that they have little performance history (e.g., the HEQT inception date is 11/1/21), four of the Simplify ETFs (HEQT, SPD, SPUC, SPYC) are rated “Gold” by Morningstar.

Each of these four ETFs simply holds iShares Core S&P 500 ETF (IVV) and hedges with S&P 500 Index options (calls for SPUC, puts for SPD, both for HEQT & SPYC).

In essence a holder would pay an additional 0.28% to 0.53% (thru Oct 31, 2022 advisor is waiving 0.25% management fee) expense for hedging IVV to various degrees.

I have no idea how the hedging will help or hurt long term, but the returns over the last 63, 126 and 252 market days (approximately 3, 6 & 12 months) don’t seem overwhelmingly promising when compared to the underlying iShares Core S&P 500 ETF (IVV).

Total returns thru 4/6/2022
      63d     126d   252d
HEQT  -4.05%  ---    ---
IVV   -4.33%  3.38%  10.84%
SPD   -5.18%  2.54%  7.93%
SPUC  -7.11%  2.20%  10.71%
SPYC  -5.70%  1.58%  9.13%



Thank you Eric.