Simplify Launches Innovative ETF Combining Income Generation With Bitcoin
The Simplify Bitcoin Strategy PLUS Income ETF (MAXI) is first ETF to provide exposure to bitcoin while generating income by selling short-dated put or calls spreads on the most liquid global equity indices
NEW YORK–(BUSINESS WIRE)–Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), is today announcing the launch of its newest fund, the Simplify Bitcoin Strategy PLUS Income ETF (NASDAQ: MAXI).
MAXI is the first ETF designed to provide investors not only with exposure to bitcoin but also with the potential to generate income by selling short-dated put or call spreads on the most liquid global equity indices. The Fund targets 100% exposure to bitcoin by investing in the front-month CME futures contract, while on the income side a sophisticated option-writing algorithm dynamically selects option type, underlier, and strikes in an attempt to generate attractive risk-adjusted returns. A second level of risk controls then seeks to mitigate tail risks associated with option selling.
“We’re very excited to be launching MAXI, providing investors for the first time with a capital efficient way to simultaneously gain exposure to bitcoin while potentially adding significant income to a portfolio,” said Paul Kim, CEO & Cofounder of Simplify.
“Whatever directional call an investor may want to make on bitcoin, MAXI can play a key role, as the Fund’s income component can help add to returns on the upside while also acting as a downside hedge by virtue of the ‘padding’ such income may deliver during potential drawdowns for bitcoin,” added Paul.
MAXI is listed on the Nasdaq and has a gross expense ratio of 0.97%. The Fund is the second bitcoin-related offering in the fast-growing Simplify ETF lineup, joining the Simplify US Equity PLUS GBTC ETF (SPBC), which targets a 100% investment in US equities with a simultaneous 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 well-known portfolio manager Michael Green; the Simplify Managed Futures Strategy ETF (CTA); and the Simplify Interest Rate Hedge ETF (PFIX), one of the best performing ETFs in any category as of the end of Q3 2022.
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.
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 pre-determined price (“strike”) by a specific date (“expiry”). An “outright” is another name for a single option leg. A “spread” is when options are bought at one strike and an equal amount of options are sold at a different strike, all at the same expiry.
Drawdown: How much an investment or trading account is down from the peak before it recovers back to the peak.
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.
The fund is actively managed and is subject to the risk that the strategy may not produce the intended results. The fund is new and has a limited operating history to evaluate.
The earnings and prospects 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 make their market price fall more disproportionately than larger companies in response to selling pressures 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 risks as the underlying securities in which the ETF invests as well as entails higher expenses than if invested into the underlying ETF directly.
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 the trading of bitcoins, which consists of transactions on electronic bitcoin exchanges (“Bitcoin Exchanges”). Pricing on Bitcoin Exchanges and other venues can be volatile and can adversely affect the value of Bitcoin futures. Currently, there is a relatively small use of bitcoins in the retail and commercial marketplace in comparison to the relatively large use of bitcoins by speculators, thus contributing to price volatility that could adversely affect the Fund’s investment in Bitcoin futures. Bitcoin transactions are irrevocable and stolen or incorrectly transferred bitcoins may be irretrievable. As a result, any incorrectly executed bitcoin transactions could adversely affect the value of the Fund’s investment in Bitcoin futures.
Cryptocurrency Risk: Cryptocurrencies operate without central authority or banks and are not backed by any government. Cryptocurrencies may experience very high volatility, and related investment vehicles 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 U.S. is still developing. Cryptocurrency exchanges have stopped operating and have permanently shut down due to fraud, technical glitches, hackers or malware. Cryptocurrencies exchanges are new, largely unregulated, and may be more exposed to fraud.
Cryptocurrency Tax Risk: Because the Subsidiary is a controlled foreign corporation, any income received by the Fund from its investments in the Subsidiary will be passed through 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 a small percentage of assets in futures can have a disproportionately large impact on the Fund and the Fund can lose more than the principal amount invested; (d) losses are potentially unlimited; (e) the possibility that the counterparty will default in the performance of its obligations.
Wholly-Owned Subsidiary Risk: The cost of investing in the Fund will be higher because you indirectly bear the expenses of the Subsidiary. The Subsidiary is not registered under the Investment Company Act of 1940 (“1940 Act”), as amended, and, unless otherwise noted in this Prospectus, is not subject to all of the investor protections of the 1940 Act, such as limits on leverage when viewed in isolation from the Fund.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
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