Simplify Enhanced Income ETF

HIGH seeks to provide monthly income by holding a short-term portfolio of income-producing US Treasurys and utilizing an option spread writing strategy.

The Simplify Enhanced Income ETF uses options spreads to generate higher yields, but recent active trading strategies have led to significant losses. Retail investors must distinguish between fixed income spreads and 'yield enhancement' strategies, which involve profit and loss from active trading. HIGH's strategy suffered in July/August due to the market pricing of rate cuts and HIGH's positioning, nearly wiping out its gains for the year.

HIGH: When Options Spreads Do Not Work

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NEW YORK--(BUSINESS WIRE)--Simplify announced today that it expects to deliver capital gains distributions across six Simplify ETFs.

Simplify Provides Estimated Capital Gain Distribution Information for 2024

HIGH combines fixed income instruments with options trading to generate a 7.2% annualized distribution yield. The fund's strategy involves T-Bills and options on indexes like NASDAQ 100 and S&P 500, but limited allocation to options restricts profitability. HIGH has underperformed compared to major indexes and peer ETFs, delivering only 11% ROI since inception, despite consistent income distributions.

HIGH: A Sophisticated Strategy, Limited Results

Initially, the Simplify Enhanced Income ETF seemed promising, offering a 9% yield by leveraging short-term U.S. treasuries and option spreads. The fund's options spread strategy, however, is too unpredictable and has downside risk that was exposed by the unwinding of the Japanese Yen carry trade. These downside risks make HIGH less attractive, questioning its reliability and suitability for retail investors seeking stable income.

HIGH: Unnecessary Risk From Unpredictable Option Spreads

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New offerings from New York Mortgage Trust, Dime Community Bancshares, and Oxford Lane Capital Corp. with fixed coupon rates and credit ratings. DCOMG achieved a perfect CDx3 Compliance Score, while Morgan Stanley and Regions Financial Corporation also priced new preferred stock offerings. Investors can buy new shares at wholesale prices through the OTC exchange, track past preferred stock IPOs below par, and stay updated on the current marketplace offerings.

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HIGH is a somewhat unique income ETF. It invests in t-bills and option spreads, generating significant income and premiums. HIGH currently yields 9.3%, although returns have slightly trailed behind.

HIGH: Recent Developments

HIGH is an ETF from Simplify Asset Management. It aims to generate monthly income through short-dated option spreads on various equities. The core holdings are Treasury Bills with an overlay of constantly changing options positions. HIGH has had respectable performance in 2024, outperforming Treasury bonds by 70 bps with a low-risk profile, suitable for cash parking instruments.

Checking In On HIGH, An Options Spreads Fund

The Simplify Enhanced Income ETF sells options to generate modest income for investors. A recent blowup at the Simplify Macro Strategy ETF highlights operational risk at the asset manager, as the fund was investing outside of its mandate. Investors may want to consider alternatives to the HIGH ETF due to heightened operational risk and mandate drift with Simplify products.

HIGH: Underappreciated Operational Risk

HIGH invests in t-bills and option spreads. The strategy aims to generate strong income at low risk and volatility. An overview of the fund follows.

HIGH: Unique Income ETF Focusing On Option Spreads, 9.4% Distribution Yield

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Simplify Provides Estimated Capital Gain Distribution Information for 2023

iShares 0-3 Month Treasury Bond ETF

Conservative investors are benefiting from the current macro environment, with cash-like funds offering 5%+ yields. Cash investments have not been profitable in the past decade, but higher interest rates are making them more attractive now. I utilize two funds for my "dry powder" investments, with varying levels of risk and liquidity.

I'm Parking My Cash In HIGH And SGOV, And They're Paying Handsomely

The Simplify Enhanced Income ETF aims to generate high income from selling option spreads on equity and fixed income indices. However, the actual portfolio differs from how the fund is marketed. The HIGH ETF has performed well, returning 7.0% in the past year with low volatility, but investors should monitor its portfolio closely.

HIGH: Enhanced Income From Option Spreads

The Simplify Enhanced Income ETF is an exchange-traded fund that employs a strategy of generating monthly income through the trading of short-dated put or call options spreads on equities. The fund operates more like a hedge fund, with a wide mandate and the ability to take long or short positions via its option spreads. HIGH has not performed impressively in 2023, generating only a 2% excess spread over T-Bills with a 3.46% annualized volatility.

HIGH: A Hedge Fund In Disguise, Has Not Impressed In 2023

Simplify Enhanced Income ETF aims to generate 10% annual income yield through a combination of bonds and options plays. The fund's performance has shown slow but steady growth, with uncorrelated returns to stocks and bonds. The fund makes a lot of high probability small plays that help it generate income without suffering any loss of NAV (so far).

HIGH: Behaving As Expected So Far

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Simplify Enhanced Income ETF is an actively managed fund that uses options plays to generate income, selling option credit spreads rather than covered calls. The fund targets a delta range of 25-30 for its options plays, indicating a low probability of failure, but also a smaller payout due to the cheaper nature of options with low deltas. The fund currently has most of its assets in short-term treasuries yielding about 5.25%, and uses this as collateral for its options plays, aiming for a total yield of close to 10%.

HIGH: A Fund That Generates Income From Selling Option Spreads

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Tua is not only the name of the potential MVP quarterback of the Miami Dolphins, but also the ticker for a new fixed income strategy from Simplify. Simplify Asset Management today announced the launch of the Simplify Short Term Treasury Futures Strategy ETF (NYSE Arca: TUA).

Simplify Launches Short-Term Treasury Futures Strategy ETF, TUA

Simplify Asset Management has launched two new income-focused ETFs designed to enhance portfolio yield without significant credit or duration exposure. The Simplify Stable Income ETF (NYSE Arca: BUCK) and the Simplify Enhanced Income ETF (NYSE Arca: HIGH) begin trading today on the NYSE Arca.

Simplify Adds BUCK & HIGH to Suite of Income-Focused ETFS

NEW YORK--(BUSINESS WIRE)--Simplify expands income-focused ETF offerings with launch of enhanced income fund (HIGH) and stable income fund (BUCK)

News for Simplify Enhanced Income ETF ETF (HIGH)