Simplify Asset Management has introduced two new ETFs providing exposure to gold and US small-cap equities while enhancing income through option overlay strategies.
David Berns, Chief Investment Officer at Simplify Asset Management.
The Simplify Gold Strategy PLUS Income ETF (YGLD US) and Simplify US Small Cap PLUS Income ETF (SCY US) are now listed on NYSE Arca with expense ratios of 0.50% and 0.55%, respectively.
According to Simplify, these ETFs are designed to meet investor demand for diversified growth opportunities while delivering consistent monthly income.
David Berns, Chief Investment Officer at Simplify Asset Management, commented: “At Simplify, one of our core missions is designing tools that allow investors and advisors to build the most capital-efficient portfolios possible.
“Both gold and small-cap equities have a role to play in a diversified portfolio, and now, through these new ETFs, they can fulfill that role while simultaneously providing an enhanced income stream.
“We’re very excited to bring these funds to market at a time when the search for enhanced yield has perhaps never been more front and center.”
Gold PLUS Income
The Simplify Gold Strategy PLUS Income ETF delivers 150% exposure to gold via gold futures contracts. By rebalancing quarterly, rather than daily, the fund seeks to mitigate volatility drag typically associated with leveraged strategies.
The fund also incorporates an options overlay strategy, primarily selling put spreads on various underlying instruments, including equity, fixed income, and commodity indices or ETFs.
Put spreads involve selling an out-of-the-money put option on an underlying asset while simultaneously buying a further out-of-the-money put option to manage risk. This approach is designed to boost total returns and provide attractive monthly income within designated risk parameters.
US Small Cap PLUS Income
The Simplify US Small Cap PLUS Income ETF delivers 100% exposure to US small-cap equities while generating enhanced income through a similar options overlay strategy that writes short-term put spreads on various underlying assets. Equity exposure is primarily achieved through the purchase of one or more representative US small-cap ETFs.
Berns added: “The capital-efficient approach underpinning SCY provides a monthly income stream without capping upside gains. This is a key distinction from other US small-cap equity plus income strategies currently on the market, which typically cap potential gains—a significant drawback for what is, at its core, a growth exposure.”
Both ETFs offer additional appeal for tax-conscious investors, as neither fund generates a K-1 tax form.