Simplify Stable Income ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy gets an Average Process Pillar rating. The strategy earns an Average People Pillar rating. Management team members could invest more of their own money in the fund. The strategy's parent firm has some investor-friendly attributes, like low portfolio manager turnover and overall affordable fees. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Simplify Stable Income ETF earns an Average Process Pillar rating.   The main contributor to the rating is the firm's five-year retention rate of 100% over the period. A low expense ratio also influences the rating, with costs ranking in its category's second-cheapest fifth. Fees reduce net returns and are one of the most reliable predictors of future performance. Lastly, the process is limited by the experience of the management team, which averages four 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.

Average

Process

Simplify Stable Income ETF earns an Average People Pillar rating. The most important driver of the rating is the firm's five-year retention rate of 100%. A low expense ratio also supports the rating, with fees ranking in its category's second-cheapest quintile. Fees detract from net returns, so the team has a lower expense hurdle to overcome. Lastly, the rating is limited by the experience of the management team, which averages four years at this fund.


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.

People

Even though Simplify Asset Management only has a two-year track record, it has shown to be an industry-standard steward, warranting an Average Parent Pillar rating. Simplify Asset Management currently runs 35 vehicles, with a total of $1.94 billion under management and a roster of 15 fund managers. This management team, in our view, has a lack of seasoning, a commonality among young firms. The group has an average of about four years of industry experience. Even though managers' past experience has not been extensive, Simplify Asset Management benefits from low manager turnover. 

 Simplify Asset Management deserves plaudits for its commitment to below-average fees for its open-end and exchange-traded funds, which showcases its willingness to prioritize investors. The firm's average net expense ratio across all funds is in the second-lowest quintile of firms.  

 To retain an Average rating, Simplify Asset Management will be expected to uphold a consistent track record of positive investor experience.

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.

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