News
Simplify Launches the RFIX ETF, Designed to More Efficiently Profit from Falling Interest Rates and Fixed Income Market Volatility
Share
The Simplify Downside Interest Rate Hedge Strategy ETF (RFIX) provides a simple and efficient way to obtain significant duration exposure; the fund joins the Simplify Interest Rate Hedge ETF (PFIX) in the firm’s distinct lineup of tools designed to help investors navigate rate movements and volatility
December 10, 2024
NEW YORK – Simplify Asset Management (“Simplify”), a leading provider of Exchange Traded Funds (“ETFs”), today announced the launch of the Simplify Downside Interest Rate Hedge Strategy ETF (RFIX), an innovative addition to its lineup of specialized ETFs designed to meet the challenges of today’s dynamic markets.
RFIX is built for investors seeking to profit from falling long-term interest rates. The fund provides exposure akin to a mirror image of that provided by the PFIX which seeks to hedge interest rate movements from rising long-term interest rates. Since launching in 2021, PFIX has garnered a 5-star Morningstar rating as of 10/31/24 out of 160 funds in the Inflation-Protected Bond fund category based on risk-adjusted returns, while dramatically outperforming its peers in the Inflation-Protected Bond Fund category.
“At Simplify, we are always looking for ways to provide investors with innovative tools that provide access to useful and compelling strategies,” said Harley Bassman, Managing Partner at Simplify, and creator of the approaches underpinning both RFIX and PFIX. “RFIX was designed to provide a transparent and capital-efficient solution for those looking to express a bullish view on bonds and hedge against potential risks. By incorporating OTC derivative profiles typically reserved for institutional investors, RFIX represents an important step in democratizing access to a strategy whose time very much may have arrived.”
RFIX uses a proprietary approach centered on a 7-year OTC receiver swaption, which functions similarly to a long-term call option on U.S. Treasury bonds. The fund’s design also maximizes positive convexity and minimizes time decay, providing investors with a significant hedge against market stress scenarios where Treasury yields tend to decline. Additionally, the ETF structure ensures daily liquidity and eliminates the need for K-1 tax forms, making it an appealing choice for a broad range of investors.
“The capital-efficient structure of RFIX enables investors to achieve their desired duration exposure with a smaller capital outlay compared to traditional bond funds,” said Bassman. “This frees up capital for use in other strategies and asset categories, resulting in more diverse and robust portfolios.”
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.
RFIX is built for investors seeking to profit from falling long-term interest rates. The fund provides exposure akin to a mirror image of that provided by the PFIX which seeks to hedge interest rate movements from rising long-term interest rates. Since launching in 2021, PFIX has garnered a 5-star Morningstar rating as of 10/31/24 out of 160 funds in the Inflation-Protected Bond fund category based on risk-adjusted returns, while dramatically outperforming its peers in the Inflation-Protected Bond Fund category.
“At Simplify, we are always looking for ways to provide investors with innovative tools that provide access to useful and compelling strategies,” said Harley Bassman, Managing Partner at Simplify, and creator of the approaches underpinning both RFIX and PFIX. “RFIX was designed to provide a transparent and capital-efficient solution for those looking to express a bullish view on bonds and hedge against potential risks. By incorporating OTC derivative profiles typically reserved for institutional investors, RFIX represents an important step in democratizing access to a strategy whose time very much may have arrived.”
RFIX uses a proprietary approach centered on a 7-year OTC receiver swaption, which functions similarly to a long-term call option on U.S. Treasury bonds. The fund’s design also maximizes positive convexity and minimizes time decay, providing investors with a significant hedge against market stress scenarios where Treasury yields tend to decline. Additionally, the ETF structure ensures daily liquidity and eliminates the need for K-1 tax forms, making it an appealing choice for a broad range of investors.
“The capital-efficient structure of RFIX enables investors to achieve their desired duration exposure with a smaller capital outlay compared to traditional bond funds,” said Bassman. “This frees up capital for use in other strategies and asset categories, resulting in more diverse and robust portfolios.”
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.
