Simplify Launches the RFIX ETF, Designed to More Efficiently Profit From Falling Interest Rates and Fixed Income Market Volatility
Simplify Asset Management has launched the Simplify Downside Interest Rate Hedge Strategy ETF (RFIX), designed for investors looking to profit from falling long-term interest rates. RFIX joins Simplify's lineup of specialized ETFs, including the highly-rated PFIX, which hedges against rising long-term interest rates. RFIX utilizes a proprietary 7-year OTC receiver swaption approach, akin to a long-term call option on U.S. Treasury bonds, maximizing positive convexity and minimizing time decay. The ETF structure ensures daily liquidity and eliminates the need for K-1 tax forms, providing a capital-efficient solution for investors. This allows for significant duration exposure with less capital outlay, freeing up funds for other strategies. Simplify aims to democratize access to institutional-grade strategies, offering transparent and efficient tools for navigating market volatility.
Simplify Asset Management ha lanciato il Simplify Downside Interest Rate Hedge Strategy ETF (RFIX), progettato per gli investitori che cercano di trarre profitto dalla diminuzione dei tassi d'interesse a lungo termine. RFIX si unisce alla gamma di ETF specializzati di Simplify, inclusi il molto apprezzato PFIX, che protegge contro l'aumento dei tassi d'interesse a lungo termine. RFIX utilizza un approccio proprietario di swaption su base OTC a 7 anni, simile a un'opzione call a lungo termine sui titoli del Tesoro statunitensi, massimizzando la convexità positiva e minimizzando il degrado temporale. La struttura ETF garantisce liquidità quotidiana ed elimina la necessità di moduli fiscali K-1, fornendo una soluzione a capitale efficiente per gli investitori. Ciò consente di ottenere un'esposizione significativa alla duration con un minore impegno di capitale, liberando fondi per altre strategie. Simplify mira a democratizzare l'accesso a strategie di livello istituzionale, offrendo strumenti trasparenti ed efficienti per affrontare la volatilità del mercato.
Simplify Asset Management ha lanzado el Simplify Downside Interest Rate Hedge Strategy ETF (RFIX), diseñado para inversores que buscan beneficiarse de la caída de las tasas de interés a largo plazo. RFIX se une a la gama de ETF especializados de Simplify, que incluye el altamente valorado PFIX, que se protege contra el aumento de las tasas de interés a largo plazo. RFIX utiliza un enfoque propietario de swaption OTC a 7 años, similar a una opción call a largo plazo sobre bonos del Tesoro de EE. UU., maximizando la convexidad positiva y minimizando la disminución del tiempo. La estructura del ETF garantiza liquidez diaria y elimina la necesidad de formularios fiscales K-1, brindando una solución eficiente en capital para los inversores. Esto permite una exposición significativa a la duration con una menor inversión de capital, liberando fondos para otras estrategias. Simplify tiene como objetivo democratizar el acceso a estrategias de grado institucional, ofreciendo herramientas transparentes y eficientes para navegar la volatilidad del mercado.
Simplify Asset Management는 하락하는 장기 금리에서 수익을 얻으려는 투자자를 위해 Simplify Downside Interest Rate Hedge Strategy ETF (RFIX)를 출시했습니다. RFIX는 장기 금리 상승에 대비하는 고평가된 PFIX를 포함한 Simplify의 전문 ETF 라인업에 추가됩니다. RFIX는 미국 국채에 대한 장기 콜 옵션과 유사한 7년 OTC 리시버 스왑션 접근 방식을 활용하여 긍정적인 볼록성을 극대화하고 시간 감소를 최소화합니다. ETF 구조는 일일 유동성을 보장하고 K-1 세금 양식의 필요성을 제거하며, 투자자에게 자본 효율적인 솔루션을 제공합니다. 이는 자본 지출을 줄이면서도 상당한 듀레이션 노출을 가능하게 하여 다른 전략을 위한 자금을 확보합니다. Simplify는 기관급 전략에 대한 접근성을 민주화하는 것을 목표로 하며, 시장 변동성을 탐색하기 위한 투명하고 효율적인 도구를 제공합니다.
Simplify Asset Management a lancé le Simplify Downside Interest Rate Hedge Strategy ETF (RFIX), conçu pour les investisseurs cherchant à tirer profit de la baisse des taux d'intérêt à long terme. RFIX rejoint la gamme d'ETF spécialisés de Simplify, y compris le très bien noté PFIX, qui se couvre contre la hausse des taux d'intérêt à long terme. RFIX utilise une approche propriétaire de swaption OTC à 7 ans, semblable à une option d'achat à long terme sur les obligations du Trésor américain, maximisant la convexité positive et minimisant la dépréciation temporelle. La structure de l'ETF garantit une liquidité quotidienne et élimine le besoin de formulaires fiscaux K-1, offrant une solution efficace en capital pour les investisseurs. Cela permet une exposition significative à la duration avec un faible investissement en capital, libérant ainsi des fonds pour d'autres stratégies. Simplify vise à démocratiser l'accès à des stratégies de niveau institutionnel, offrant des outils transparents et efficaces pour naviguer dans la volatilité du marché.
Simplify Asset Management hat den Simplify Downside Interest Rate Hedge Strategy ETF (RFIX) ins Leben gerufen, der für Investoren gedacht ist, die von sinkenden langfristigen Zinssätzen profitieren möchten. RFIX ergänzt das Angebot an spezialisierten ETFs von Simplify, wozu auch das hoch bewertete PFIX gehört, das gegen steigende langfristige Zinssätze absichert. RFIX verwendet einen proprietären Ansatz mit 7-jährigen OTC-Receiver-Swaptionen, ähnlich einer langfristigen Kaufoption auf US-Staatsanleihen, um eine positive Konvexität zu maximieren und Zeitablauf zu minimieren. Die ETF-Struktur gewährleistet tägliche Liquidität und beseitigt die Notwendigkeit für K-1-Steuerformulare, wodurch eine kapitaleffiziente Lösung für Investoren bereitgestellt wird. Dies ermöglicht eine signifikante Durationsexposition mit einem geringeren Kapitalaufwand und schafft Spielräume für andere Strategien. Simplify hat sich zum Ziel gesetzt, den Zugang zu institutionellen Strategien zu demokratisieren und bietet transparente und effiziente Werkzeuge zur Navigation durch die Marktvolatilität.
- Launch of RFIX ETF providing significant duration exposure to falling long-term interest rates.
- RFIX utilizes a proprietary 7-year OTC receiver swaption approach, maximizing positive convexity and minimizing time decay.
- ETF structure ensures daily liquidity and eliminates K-1 tax forms.
- Capital-efficient structure allows for more diverse and robust portfolios.
- None.
Insights
The launch of RFIX represents a significant innovation in fixed-income investing, offering retail investors institutional-grade interest rate exposure tools. The ETF's use of 7-year OTC receiver swaptions provides enhanced capital efficiency compared to traditional bond funds, allowing investors to achieve similar duration exposure with less capital commitment.
The timing of this launch is particularly strategic, as markets anticipate potential Fed rate cuts in 2024. RFIX complements PFIX's existing success (demonstrated by its 5-star Morningstar rating) and creates a complete toolkit for navigating both rising and falling rate environments. The elimination of K-1 tax forms and daily liquidity features make this institutional-style strategy more accessible to retail investors.
This product launch addresses a important market gap by democratizing sophisticated interest rate strategies previously to institutional investors. The ETF structure provides transparency and operational simplicity that traditional OTC derivatives lack, while maintaining the leverage benefits of swaptions. With the potential for rate cuts on the horizon, RFIX's positive convexity feature could offer amplified returns in falling rate scenarios.
The success of its sister fund PFIX suggests strong market demand for innovative rate-focused products. The timing of this launch aligns well with market expectations of a dovish Fed pivot, potentially attracting investors looking to position for rate cuts.
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
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
“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.”
The Simplify team also produces some of the investment industry’s most engaging and informative content, including deep dives into the various investment strategies, reactions to headline-making news and trends, and interviews with some of the most compelling names in research, trading and portfolio construction, which you can access here: https://www.simplify.us/news-media.
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. For more information, visit www.simplify.us.
GLOSSARY:
Duration: A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates.
Convexity: A measure of how the duration of a bond changes as interest rates change. The greater the convexity of a bond, the greater that change will be for a specific interest rate shift.
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MEDIA CONTACT:
Chris Sullivan
Craft & Capital
chris@craftandcapital.com
Source: Simplify Asset Management
FAQ
What is the RFIX ETF?
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