Newfound Research, Simplify Asset Management Announce Partnership and Launch of New Suite of Structured Alpha ETF Model Portfolios
Direct, efficient uses of diversification and leverage allow new open architecture portfolios to gain exposure to assets that may improve portfolio returns without a material increase in portfolio risk
January 12, 2022
There are four portfolios in the initial Structural Alpha suite: Conservative, Conservative Growth, Moderate Growth and Growth. The portfolios are built using an open architecture approach, including funds from a variety of providers.
“Investors are facing a very real dilemma as low interest rates continue to push many to take on greater levels of risk. Alternatives can offer one solution but are often abandoned well before they begin to provide the expected portfolio benefits. What investors need is a structural edge that takes a traditional portfolio and uses capital efficiency to layer on diversification and tail risk protection,” said Corey Hoffstein, Co-Founder & Chief Investment Officer of Newfound.
“That combination is what ‘structural alpha’ is all about: how a portfolio is constructed rather than a particular trading strategy. It’s an idea I’ve been pursuing for some time, but the right tools were not yet available to put this idea in practice. Simplify’s ETFs changed all that and provide many of the building blocks that the Structural Alpha approach requires to go from idea to impactful solution,” he added.
“Corey’s work on navigating risk is second to none, and we’re thrilled to be partnering with him and Newfound on these new model portfolios,” said Paul Kim, Co-Founder and CEO of Simplify. “One of our primary goals has always been to provide investors and advisors with the complete toolkit so they can build smarter portfolios, navigate challenging markets, seek out opportunities tied to convexity, and hedge against significant tail risks. With the rollout of the Structural Alpha suite, all of those tools and approaches are being combined and made available in ready-made, well-constructed solutions that can have a significant impact in helping investors meet their investing goals over both the short- and long-term.”
The Simplify and Newfound team further point to four key features of these new models:
- Capital Efficiency. Building a capital efficient core for each portfolio allows the models to achieve the same strategic positioning with a smaller allocation, freeing up capital for greater diversification.
- Convexity. Hedges are put in place for equity, rate, and volatility markets, increasing portfolio resiliency and allowing for investing from a position of strength during turbulent markets.
- Benefits of ETFs as Portfolio Building Blocks. ETFs provide unparalleled cost and tax efficiency, two of the most important factors in long-term return generation.
- Zero Strategist Fee. Access to the models is free, allowing investors and advisors to put the various models to work in a scalable, cost-effective way.
For more information on the Structural Alpha suite, please visit this site.
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.
ABOUT NEWFOUND RESEARCH
Newfound Research LLC is a quantitative investment and research firm dedicated to helping investors pro-actively navigate the risks of investing through thought leadership and investment acumen. To build more resilient portfolios, we seek to diversify across the investment axes of what, how, and when. For more information, visit www.thinknewfound.com.