The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Simplify Stable Income ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy's management team is about as experienced as others, but due to other weaknesses, the strategy earns a Below Average People Pillar. The fund's assessment garners an Average Process Pillar rating. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including high portfolio manager retention but is held back by an unfavorable lineup success ratio.

Analyst Rating

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Simplify Stable Income ETF earns an Average Process Pillar rating.    The predominant contributor to the rating is the firm's five-year retention rate of 100% over the period. A low expense ratio also strengthens the process, with fees ranking in its category's second-cheapest fifth. A higher expense ratio reduces net returns, so being affordable gives this fund a significant advantage. Lastly, the process is limited by the experience of the management team, which averages five years at this fund.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks to provide monthly income.  The fund’s investment adviser seeks to fulfill the fund’s investment objective by using two income strategies: (1) an interest income strategy and (2) an income generating option strategy. The fund invests primarily in interest income producing U.S. Treasury securities such as bills, notes, and bonds and fixed income ETFs that invest primarily in U.S. Treasuries. To generate additional income, and the fund employs an option spread writing strategy on equity ETFs and fixed income ETFs.

 This strategy has a 5.8% 12-month yield, higher than its average peer's 3.3%. Typically, higher yields come at the cost of higher credit risk.

Average

Process

Simplify Stable Income ETF earns a Below Average People Pillar rating. The team is strengthened by the firm's five-year retention rate of 100%. However, the rating is weakened by the experience of the management team, which averages five years at this fund. The turnover of its management team also detracts from the team. The fund last saw a manager change three months ago.


Paul Kim, the longest-tenured manager, has nine years of listed portfolio management experience. The strategies they currently manage have an average Morningstar Rating of 1.8 stars, demonstrating disappointing risk-adjusted performance compared with category peers. Paul Kim draws on only two other listed supporting managers. Although, together they are adequately equipped, with five years of average listed portfolio management experience. None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

Below Average

People

In a competitive industry, Simplify Asset Management doesn't differentiate itself enough, leading to an Average Parent Pillar rating. Portfolio management turnover has been minimal at the firm since the firm's inception. Long-term stability signals a strong investment culture. The firm's lineup has had discouraging initial results. Its three-year risk-adjusted success ratio is 0%, indicating that of the strategies with a three-year track record, 0% have both survived and beaten their respective category median on a risk-adjusted basis. A low success ratio not only indicates weak performance but also provides insight into a firm’s discipline around investment strategy and product development. With an average three-year Morningstar Rating of 1.8 stars, the risk-adjusted performance of Simplify Asset Management's open-end and exchange-traded funds falls short of competitors.

Parent

Simplify Stable Income ETF

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

Simplify Stable Income ETF uses option writing to enhance income for fixed income investors. The ETF employs multiple option strategies, including call spread and put spread sub-strategies. BUCK has $117m in AUM and has a TTM yield of 6.4%, with 35bps in fees. Holdings and Payouts are reviewed before comparing BUCK to other ETFs. I rate BUCK at best as a Hold as similar ETFs with longer histories have better results, including another ETF from Simplify.

First Look At The BUCK ETF From Simplify

Simplify launched the Simplify Stable Income ETF in October 2022, and it has performed well since then. Its yield outpaces T-Bills, and its risk is not much higher, presenting it favorably over T-Bills alone. The Simplify Stable Income ETF offers a lower risk option compared to the Simplify Enhanced Income ETF, making it far more appealing for conservative investors.

BUCK: Simplify's Cash ETF Catering To Conservative Investors

Simplify Aggregate Bond Plus Credit Hedge ETF

Simplify High Yield PLUS Credit Hedge ETF

Simplify Opportunistic Income Etf

Simplify Managed Futures Strategy ETF

Simplify Tail Risk Strategy ETF

Simplify Market Neutral Equity Long/Short ETF

Simplify Macro Strategy ETF

Simplify Commodities Strategy No K-1 ETF

Simplify Hedged Equity ETF

Simplify Enhanced Income ETF

Simplify Bitcoin Strategy PLUS Income ETF

Simplify Interest Rate Hedge ETF

Simplify Health Care ETF

Simplify Multi-Qis Alternative ETF

Simplify US Equity PLUS GBTC ETF

Simplify US Equity PLUS Downside Convexity ETF

Simplify US Equity PLUS QIS ETF

Simplify US Equity Plus Upside Convexity ETF

Simplify Propel Opportunities ETF

Simplify Volatility Premium ETF

Simplify Short Term Treasury Futures Strategy ETF

Simplify Risk Parity Treasury ETF

Simplify Volt RoboCar Disruption and Tech ETF

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 2023

iShares Core U.S. Aggregate Bond ETF

Alerian MLP ETF

Vanguard Total Bond Market ETF

Doubleline Opportunistic Bond ETF

iShares Trust iShares 1-5 Year Investment Grade Corporate Bond ETF

Innovator Premium Income 10 Barrier Etf-July

Pimco Senior Loan Active Exchange-Traded Fund

PIMCO Multi Sector Bond Active ETF

Vanguard Short-Term Corporate Bond ETF

With the Fixed Income Symposium taking place on Monday, July 24, the VettaFi Voices gathered at the water cooler to discuss the current state of fixed income markets.

VettaFi Voices On: The State of Fixed Income

Blackrock Flexible Income ETF

Panagram Bbb-B Clo Etf

VettaFi's Fixed Income Symposium, happening on July 24th, is fast approaching. The symposium will bring together industry thought leaders.

Fixed Income Symposium Brings Thought Leaders Together

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 Stable Income ETF ETF (BUCK)