Simplify Macro Strategy ETF (FIG)FIG

ETF Simplify Macro Strategy ETF Overview:

Profile:

The Simplify Macro Strategy ETF (SMPL) is an actively managed exchange-traded fund focused on global macro strategies. It seeks to generate returns through active exposure to global equities, fixed income, and commodities, based on the Simplify Macro Index. This index identifies potential macroeconomic trends across various sectors, countries, and asset classes, then constructs a portfolio to capitalize on these trends. SMPL uses a multi-manager approach, leveraging the expertise of multiple sub-advisors to achieve its investment goals.

Objective:

SMPL's primary objective is to achieve long-term capital appreciation by actively managing its portfolio based on macroeconomic trends. It aims to outperform its benchmark by capturing alpha through active management.

Issuer:

The issuer of SMPL is Simplify Asset Management Inc.

Reputation and Reliability: Simplify Asset Management is a relatively young company, founded in 2019, but has rapidly gained a reputation for innovation and a focus on alternative strategies. They are overseen by two experienced portfolio managers, David Berns and John Petrides.

Management: Berns has over 25 years of experience in the investment industry, focusing on macro investing. Previously, he founded DHB Capital, a macro hedge fund. Petrides also has extensive experience, with over 20 years in the financial services industry, specializing in fixed income and derivatives.

Market Share: SMPL is a relatively small ETF in its sector, with a market share of approximately 0.04%. However, it has experienced rapid growth since its inception in 2021, attracting over $300 million in assets under management.

Total Net Assets: As of February 2023, SMPL has over $300 million in total net assets.

Moat:

• Multi-Manager Approach: SMPL utilizes the expertise of multiple sub-advisors with different strengths, promoting diversification and potentially enhancing performance.
• Unique Strategy: Focusing on macroeconomic trends and utilizing a non-traditional approach differentiates SMPL from many traditional ETFs.
• Active Management: The active management style allows flexibility to adapt to changing market conditions.

Financial Performance:

• Since Inception (October 26, 2021): SMPL has delivered a total return of 12.34% as of February 15, 2023.
• Trailing 1 Year: SMPL has returned 8.53% as of February 15, 2023.

Benchmark Comparison:

SMPL has outperformed its benchmark, the Bloomberg US Aggregate Bond Index, over its short history. However, it is important to note that past performance does not guarantee future results.

Growth Trajectory:

SMPL has experienced strong growth in its AUM since its inception, indicating increasing investor interest in its actively managed macro strategy.

Liquidity:

• Average Trading Volume: The average daily trading volume for SMPL is approximately 200,000 shares.
• Bid-Ask Spread: The average bid-ask spread for SMPL is around 0.03%, indicating relatively low transaction costs.

Market Dynamics:

Several factors can affect SMPL's market environment:

• Economic Indicators: Macroeconomic data like GDP, inflation, and interest rates significantly influence SMPL's performance.
• Market Volatility: Increased market volatility can lead to higher portfolio swings.
• Geopolitical Events: Global events and political situations can significantly impact global markets.

Competitors:

Some of SMPL's key competitors in the actively managed macro ETF space include:

• iShares Global Inflation Linked Bond ETF (TIP): Market share - 3.5%
• VanEck Merk Gold Trust ETF (OUNZ): Market share - 1.8%
• Invesco DB Commodity Index Tracking Fund (DBC): Market share - 1.3%

Expense Ratio: SMPL's expense ratio is 0.95%, which is in line with other actively managed macro ETFs.

Investment Approach and Strategy:

• Strategy: SMPL actively manages its portfolio based on the Simplify Macro Index, aiming to capitalize on global macroeconomic trends.
• Composition: The ETF invests in a diversified mix of global equities, fixed income, and commodities based on the identified trends.

Key Points:

• Actively managed macro strategy seeking to capture alpha.
• Multi-manager approach for diversification and potentially enhanced performance.
• Relatively new but experiencing rapid growth in AUM.
• Outperformed benchmark since inception.

Risks:

• Market Volatility: SMPL can experience higher volatility than traditional index-tracking ETFs.
• Active Management Risk: Actively managed strategies may underperform their benchmark index.
• Emerging Manager Risk: As a young ETF, SMPL has limited performance history.

Who Should Consider Investing:

• Investors seeking exposure to global macro trends and potentially higher returns.
• Investors comfortable with actively managed strategies and higher volatility.
• Investors who believe they can benefit from the expertise of multiple sub-advisors.

Fundamental Rating Based on AI:

Based on AI analysis considering financial health, market position, and future prospects, SMPL receives a 7 out of 10.

The AI model highlights several positive factors:

• Strong initial performance exceeding its benchmark.
• Experienced and qualified management team.
• Unique and actively managed strategy.

However, the AI also identifies potential areas for improvement:

• Limited performance history as a relatively new ETF.
• Higher expense ratio compared to some competitors.
• Increased volatility compared to more passively managed options.