Simplify Launches Pair of Active ETFs

Simplify Asset Management, which has $1.6 billion in exchange-traded funds, added a pair of actively managed income ETFs as demand for passive investing slows amid roiling stock and bond markets.  

New York-based Simplify, manager of 21 ETFs, launched the Simplify Enhanced Income ETF (HIGH) and the Simplify Stable Income ETF (BUCK). 

BUCK, the firm’s first cash alternative ETF, will employ an options writing strategy to increase yields on cash. Meanwhile, HIGH, an enhanced income fund, will use the firm’s options-writing algorithm to “focus on delivering significant income with low correlation to traditional credit and duration exposure.”  

Both HIGH and BUCK have rolled out at a fruitful time for active funds. Investors are increasingly choosing active management over passive options like index funds, as they seek protection from falling bond and stock markets and investments tracking them. Nearly 63% of all active funds have beaten their benchmarks since May, according to Morningstar data.  

“Traditional approaches to fixed income have been exposed this year as either under-delivering when it comes to generating income or being highly volatile in the midst of the market chaos that has marked so much of 2022,” Simplify CEO Paul Kim said in a statement.  

Actively managed funds have gained significant traction in the past year, drawing $65.8 billion, or almost 15% of the $453 billion pulled in by ETFs in 2022, according to ETF.com data. According to Morningstar, 60% of new ETFs that have launched over the past two years have been actively managed, while about one-third, or 934, of all ETFs are actively managed.  

"We're in an environment, I believe, where active management is more important than ever," said Holly Framsted, Capital Group director of ETFs, during an appearance at CNBC's Financial Advisor Summit earlier this year. Capital unveiled three new actively managed funds this week. 

HIGH and BUCK will be listed on the NYSE Arca and have expense ratios of 0.51% and 0.36% respectively, according to company filings. Both funds will give investors access to income-focused offerings. 

 
Contact Shubham Saharan at [email protected]