NEW YORK–(BUSINESS WIRE)–Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), today announces the launch of its newest fund, the Simplify Bitcoin Strategy PLUS Income ETF (NASDAQ: MAXI).
MAXI is the first ETF designed to give investors not only exposure to bitcoin, but also the potential to generate income by selling short-dated put or call spreads on the most liquid global equity indices. The fund aims for 100% exposure to bitcoin by investing in the first-month CME futures contract, while on the income side a sophisticated options writing algorithm dynamically selects option type, underlying and strike in an attempt to generate attractive risk-adjusted returns. A second level of risk controls then seeks to reduce tail risk associated with option sales.
“We are very excited to launch MAXI, which for the first time provides investors with a capital-efficient way to simultaneously gain exposure to bitcoin and potentially add significant income to a portfolio,” said Paul Kim, CEO and co-founder of Simplify.
“Whatever direction an investor may wish to take on bitcoin, MAXI can play a key role, as the fund’s income component can help boost returns on the upside while acting as a downside hedge by virtue of the ‘cushioning’ that income can provide during potential draws for bitcoin,” Paul added.
MAXI is listed on Nasdaq and has a gross cost share of 0.97%. The fund is the second bitcoin-related offering in the fast-growing Simplify ETF series, joining the Simplify US Equity PLUS GBTC ETF (SPBC), which aims for a 100% investment in US equities with a concurrent 10% exposure to bitcoin via the grayscale Bitcoin Trust (GBTC).
Other recent additions to the Simplify fund family include the Simplify Macro Strategy ETF (FIG), actively managed by noted portfolio manager Michael Green; Simplify Managed Futures Strategy ETF (CTA); and the Simplify Interest Rate Hedge ETF (PFIX), one of the best ETFs in any category at the end of Q3 2022.
ABOUT SIMPLIFY ASSET MANAGEMENT INC
Simplify Asset Management Inc. is a registered investment advisor founded in 2020 to help advisors tackle the most pressing portfolio challenges with an innovative set of options-based strategies. By taking into account real investor needs and market behavior, along with the non-linear power of options, our strategies allow for the tailored portfolio results that clients are looking for. For more information, visit www.simplify.us.
DEFINITIONS:
Option: An option is a contract that gives the buyer the right to either buy (in the case of a call option) or sell (in the case of a put option) an underlying asset at a predetermined price (“strike”) by a specific date (“expiration”) . An “outright” is another name for a single option leg. A “spread” is when options are bought at one strike and an equal number of options are sold at another strike, all at the same expiration.
Drawdown: How much an investment or trading account is down from the top before it recovers to the top.
IMPORTANT INFORMATION:
Investors should carefully consider the investment objectives, risks, fees 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 investing.
An investment in the fund involves risk, including possible loss of principal.
The fund is actively managed and is subject to the risk that the strategy does not produce the intended results. The fund is new and has a limited operating history to evaluate.
The earnings and outlook of small and medium-sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. Small and medium-sized companies normally have a lower trading volume than larger companies, which may tend to cause the market price to fall more disproportionately than larger companies in response to selling pressure and may have limited markets, product lines or financial resources and lack management experience.
The fund invests in ETFs (Exchange-Traded Funds) and is therefore subject to the same risk as the underlying securities in which the ETF invests, and incurs higher expenses than if invested directly in the underlying ETF.
Bitcoin risk: The value of the Fund’s investment in Bitcoin futures is subject to fluctuations in the value of bitcoins. The value of bitcoins is determined by the supply of and demand for bitcoins in the global market for trading bitcoins, which consists of transactions on electronic bitcoin exchanges (“Bitcoin Exchanges”). Pricing on Bitcoin exchanges and other venues may be volatile and may adversely affect the value of Bitcoin futures. Currently, there is relatively little use of bitcoins in the retail and commercial marketplace compared to the relatively large use of bitcoins by speculators, thereby contributing to price volatility that may adversely affect the Fund’s investment in Bitcoin futures. Bitcoin transactions are irreversible and stolen or incorrectly transferred bitcoins can be unrecoverable. As a result, any improperly executed bitcoin transactions may adversely affect the value of the Fund’s investment in Bitcoin futures.
Cryptocurrency Risks: Cryptocurrencies operate without central authority or banks and are not backed by any government. Cryptocurrencies may experience very high volatility, and related investment instruments that invest in cryptocurrencies may be affected by such volatility. Cryptocurrency is not legal tender. Federal, state or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in the United States is still evolving. Cryptocurrency exchanges have stopped working and have permanently closed due to fraud, technical errors, hackers or malware. Cryptocurrency exchanges are new, largely unregulated, and may be more prone to fraud.
Cryptocurrency Tax Risks: Because the Subsidiary is a controlled foreign corporation, any income received by the Fund from its investments in the Subsidiary will be transferred to the Fund as ordinary income, which may be taxed at less favorable rates than capital gains.
Futures contract risk: Futures contracts involve the following risks (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the forward or futures contract; (b) possible lack of a liquid secondary market; (c) leverage, which means that a small percentage of assets in futures may have a disproportionate impact on the Fund and the Fund may lose more than the principal amount invested; (d) losses are potentially unlimited; (e) the possibility that the counterparty will default on the fulfillment of its obligations.
Wholly owned subsidiary risk: The cost of investing in the fund will be higher because you indirectly bear the subsidiary’s expenses. The Subsidiary is not registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, and, unless otherwise stated in this prospectus, is not subject to all of the investor protections of the 1940 Act, such as limitations on leverage viewed in isolation from the fund.
Although the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Using an option overlay strategy entails the risk that the fund that buys a put or call option risks losing the entire premium invested in the option if the fund does not exercise the option. In addition, securities and options traded in over-the-counter markets may be traded less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
Simplify ETFs are distributed by Foreside Financial Services, LLC.
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