Simplify Adds to Its Growing Lineup of Fixed Income Solutions With the Launch of the Simplify National Muni Bond ETF (NMB)

By: Simplify Asset Management via Business Wire

September 10, 2024 at 08:30 AM EDT

Actively managed fund combines three sources of potential return: muni bond coupons, active muni bond trading & option-writing income

Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), is today adding a distinct actively managed municipal bond ETF to its growing lineup of income-focused strategies with the launch of the Simplify National Muni Bond ETF (NMB).

NMB is sub-advised by Foundation Credit, a specialist credit investment firm that has more than a decade of experience managing portfolios for institutional investors. This new fund employs an actively managed municipal bond strategy, with the goal of achieving attractive (tax-free) income through municipal bond coupons while simultaneously generating (taxable) gains by opportunistically trading undervalued municipal securities. Additionally, NMB incorporates a risk-managed, income-generating options selling strategy that involves selling option spreads across a variety of instruments, including equity, fixed income, and commodity indices and ETFs.

“Rather than simply allowing muni investors to clip coupons, NMB is built to combine three sources of potential return: the yields from the muni bonds themselves, opportunistic investments in securities overlooked by the traditional passive indices, and the income generated by the option-writing strategy,” said David Berns, CIO and cofounder of Simplify. “It’s a capital efficient means for investors to stack a number of different return sources without requiring additional investment outlay.”

“This combination of taxable and tax-free income sources can result in after-tax yields that far exceed those of national municipal bond indexes. NMB is a powerful new tool for investors and we’re very pleased to be bringing it to market,” added David Berns.

NMB is the latest addition to Simplify’s lineup of fixed income solutions, headlined by the $1.2 billion Simplify MBS ETF (MTBA) and the Simplify Short Term Treasury Futures Strategy ETF (TUA). Overall, the Simplify fund lineup is fast approaching the $6 billion AUM mark as investors have been drawn to the firm’s highly differentiated approaches.

For more information on NMB, please visit https://www.simplify.us/etfs/nmb-simplify-national-muni-bond-etf

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.

IMPORTANT INFORMATION:

Investors should carefully consider the investment objectives, risks, charges, and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF's prospectus or Summary prospectus containing this and other important information, please call (855) 772-8488, or visit SimplifyETFs.com. Please read the prospectus carefully before you invest.

An investment in the fund involves risk, including possible loss of principal.

The fund is actively-managed is subject to the risk that the strategy may not produce the intended results. The fund is new and has a limited operating history to evaluate. Distributions are not guaranteed.

The Fund invests in ETFs (Exchange-Traded Funds) and entails higher expenses than if invested into the underlying ETF directly. The lower the credit quality, the more volatile performance will be. When junk bonds sell off, the lowest-rated bonds are typically hit hardest known as blow up risk. Likewise, the riskiest bonds typically rise fastest in a bull market however these investments that don't have a credit rating are typically the most volatile, hard to price and the least liquid.

The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The Fund's investment in fixed income securities is subject to credit risk (the debtor may default) and prepayment risk (an obligation paid early) which could cause its share price and total return to be reduced. Typically, as interest rates rise the value of bond prices will decline and the fund could lose value.

While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.

Fixed Income Securities Risk: When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. In general, the market price of fixed income securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities.

Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.

Simplify ETFs are distributed by Foreside Financial Services, LLC. Foreside and Simplify are not related.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240910720827/en/

Contacts

MEDIA:

Chris Sullivan

Craft & Capital

chris@craftandcapital.com

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Simplify Adds to Its Growing Lineup of Fixed Income Solutions With the Launch of the Simplify National Muni Bond ETF (NMB)

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