Simplify Announces the Launch of the Market Neutral Equity Long/Short ETF (EQLS)
Fund delivers a modern take on an equity long/short portfolio, utilizing a multi-factor machine learning-powered quantitative ranking system to drive equity exposure and a dynamic deleveraging strategy to help avoid severe drawdowns
June 14, 2023
The Fund is a first-of-its-kind ETF, utilizing a proprietary machine learning stock selection model to deliver a modern take on the equity long/short portfolio.
EQLS invests in baskets of global equities, primarily through total return swaps that provide the returns, long or short, of a basket of common stocks. The companies in these baskets are selected using a multi-factor quantitative ranking system powered by machine learning. The swaps provide the fund with equity exposure of approximately 200% long the stocks of companies exhibiting positive performance factors, and 200% short the stocks of companies exhibiting negative performance factors.
EQLS is also designed to have a dynamic de-leveraging strategy to help avoid severe drawdowns, an additional key point of differentiation versus other market neutral approaches.
“Market neutral strategies, which seek to profit during both rising and falling markets, should provide significant diversification benefits and compelling return profiles for investors but too often the category has disappointed, missing significant moves to the upside and being slow to react to downward pressures. With EQLS, we’ve sought to update how an equity long/short portfolio can be constructed and managed,” said David Berns, PhD, Simplify’s Chief Investment Officer and Cofounder.
“Advancements in machine learning allow for entirely new approaches to detecting patterns and translating those patterns into formulas used to forecast securities prices. That technology, coupled with the use of swaps, allows EQLS to stay true to its mission and to do so with greater capital efficiency and an added income component via gains on the swaps. We’re very pleased to be bringing this new ETF to market and look forward to discussing the challenges that EQLS can help to solve,” added Berns.
More information on EQLS can be found here.
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.