News
Simplify Introduces China A Shares Plus Income ETF (CAS), Providing A Share Exposure with Options Overlay Designed to Deliver Additional Income
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CAS is actively managed to provide exposure to small, mid and large cap Chinese mainland-listed companies; the Fund uses total return swaps so investor cash would not be locked up in the event of adverse geopolitical events.
January 14, 2025
NEW YORK – Simplify Asset Management (“Simplify”), a leading provider of Exchange Traded Funds (“ETFs”), today introduced the Simplify China A Shares PLUS Income ETF (CAS), an actively-managed fund designed to achieve capital appreciation in its core portfolio, while providing investors additional current income via exposure to mainland Chinese equities utilizing an options overlay.
China A shares are equities that trade on mainland China exchanges and are predominantly held by domestic Chinese investors. The exposure available via the A share market is much broader than that available via the offshore Chinese equities that are typically accessed by foreign investors.
Simplify delivers China A share exposure in this new fund via total return swaps, which are traded through major global banks. The fund also includes a risk-managed options overlay that involves selling put spreads on a variety of underlying instruments, including equity, fixed income, commodity indices, and/or ETFs — with the goal of providing investors with additional income without requiring additional capital outlay.
“We’re very pleased to be adding China A shares to our growing roster of ‘PLUS Income’ ETFs,” said David Berns, CIO and Co-Founder of Simplify. “We’re equally excited about the means through which we are delivering this exposure. The coming year is likely to bring with it heightened geopolitical tensions, including between the U.S. and China. By accessing A share performance via total return swaps, investors do not face the possibility of their capital being locked up in the event of sanctions or other actions that may make A share equities themselves untradeable or otherwise inaccessible.”
David added that the swaps in use with CAS are designed to precisely track A share equity indices while also enjoying a performance advantage over physical shares due to favorable funding rates, as dealers effectively share their lending revenues with the swap holders.
“China is and will remain a key component of any well-diversified international portfolio, but the means through which investors add their China exposure must change with the times and with the very real risks investors now face,” continued David. “With CAS, we believe we have built a more robust and resilient China ETF, all while delivering the additional income today’s investors crave. We’re eager to continue to educate the marketplace about this approach.”
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.
China A shares are equities that trade on mainland China exchanges and are predominantly held by domestic Chinese investors. The exposure available via the A share market is much broader than that available via the offshore Chinese equities that are typically accessed by foreign investors.
Simplify delivers China A share exposure in this new fund via total return swaps, which are traded through major global banks. The fund also includes a risk-managed options overlay that involves selling put spreads on a variety of underlying instruments, including equity, fixed income, commodity indices, and/or ETFs — with the goal of providing investors with additional income without requiring additional capital outlay.
“We’re very pleased to be adding China A shares to our growing roster of ‘PLUS Income’ ETFs,” said David Berns, CIO and Co-Founder of Simplify. “We’re equally excited about the means through which we are delivering this exposure. The coming year is likely to bring with it heightened geopolitical tensions, including between the U.S. and China. By accessing A share performance via total return swaps, investors do not face the possibility of their capital being locked up in the event of sanctions or other actions that may make A share equities themselves untradeable or otherwise inaccessible.”
David added that the swaps in use with CAS are designed to precisely track A share equity indices while also enjoying a performance advantage over physical shares due to favorable funding rates, as dealers effectively share their lending revenues with the swap holders.
“China is and will remain a key component of any well-diversified international portfolio, but the means through which investors add their China exposure must change with the times and with the very real risks investors now face,” continued David. “With CAS, we believe we have built a more robust and resilient China ETF, all while delivering the additional income today’s investors crave. We’re eager to continue to educate the marketplace about this approach.”
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.
