Simplify Asset Management Launches The Simplify Risk Parity Treasury ETF (TYA)
New ETF is designed to provide investors with capital-efficient duration exposure while simultaneously seeking to amplify yield curve efficiencies in the middle of the curve
September 28, 2021
TYA is designed to provide significant duration via modest capital allocation, while simultaneously seeking to harvest yield curve benefits from the middle of the curve. It does so by investing in a combination of US Treasuries and US Treasury futures from the middle of the curve, and targets fund-level duration equal to that of the ICE 20+ Year US Treasury Index.
“In the current low yield environment, it is more important than ever to be mindful of how you invest in duration. Capital efficiency and yield curve efficiency are key to a successful Treasury investment strategy,” said David Berns, Ph.D., CIO and Co-Founder with Simplify. “Unfortunately, all too often efficient Treasury investing requires leverage, which can be a significant operational and compliance hurdle for most investors and advisors. That’s an issue we’ve designed TYA to solve, and we’re very excited to be bringing this new fund to market.”
TYA can help solve for a number of portfolio needs. For some investors, the fund can be used as a core long duration asset with the potential for excess carry relative to cash investments in long-term Treasuries. The fund can also be used as a capital-efficient replacement for intermediate duration assets, as investors only need a fraction of the capital required by an unlevered position. Additionally, with its dual goals of capital and yield curve efficiency, TYA can be a key building block in more innovative portfolio systems such as risk parity.
TYA joins a Simplify ETF family that in just over one year, has already grown to $711 million AUM as of September 9th 2021, as advisors, family offices, institutions and the retail investor community have been drawn to the more scientific approach the firm has pioneered in combining equity index exposures with robust options overlays. More recently, the firm has also introduced a number of innovative ETF solutions designed around interest rate hedging (PFIX), volatility income (SVOL) and equity plus bitcoin exposure, via GBTC (SPBC).
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.