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

 The longest-tenured manager is experienced, but other weaknesses limit the strategy to a Below Average People Pillar rating. The fund's assessment results in an Average Process Pillar rating. The strategy's parent firm has some investor-friendly attributes, like modest portfolio manager turnover, but it is held back by relatively short-tenured portfolio managers. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

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Progressive

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Simplify Market Neutral Eq Long/Shrt ETF earns an Average Process Pillar rating. 

The main driver of the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also contributes to the process. With three portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the experience of the management team, which averages seven years at this fund.

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

The investment seeks to provide positive absolute returns and income.  The fund invests in equity securities primarily through total return swaps that provide the returns, long or short, of a basket of common stocks. The companies in the swap basket are selected using a third-party, and multi-factor quantitative ranking system based on machine learning. The ranking system seeks to identify the factors that are driving both positive and negative returns. 

 In terms of portfolio turnover, on a year-over-year basis, 0% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Simplify Market Neutral Eq Long/Shrt ETF earns a Below Average People Pillar rating. The team benefits from the firm's five-year retention rate of 100%. However, the rating is limited by the experience of the management team, which averages seven years at this fund. The turnover of its management team also limits the team. The fund last saw a manager change nine months ago.


Paul Kim, the longest-tenured manager, has nine years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.0 stars, demonstrating underwhelming risk-adjusted performance. The team is small but adequately equipped, with two other supporting listed managers. Together, the three boast seven years of average listed portfolio management experience. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

Below Average

People

Simplify Asset Management has some investor-friendly attributes, but other attributes warrant caution, 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. Only two years of average tenure among Simplify Asset Management's longest-tenured managers gives us pause. In isolation, seasoned teams tend to have more experience to draw upon should they need to navigate turbulent market conditions. The Simplify Asset Management roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as evidenced by its average three-year Morningstar Rating of 2.0 stars.

Parent

Simplify Market Neutral Equity Long/Short ETF

EQLS seeks to achieve absolute returns and income by investing in a long/short equity portfolio based on a proprietary machine-learning stock selection model. The fund invests in US and foreign companies of any capitalization and seeks to deliver market-neutral exposure.

The current market is heavily skewed towards tech, making it difficult to generate alpha without a tech-heavy portfolio. The Simplify Market Neutral Equity Long/Short ETF is a relative newcomer that aims to provide both long and short exposure to a selection of equities. However, EQLS's market-neutral strategy is not designed for the current tech-heavy market, and it has failed to fulfill its investment objective.

EQLS: Market-Neutral Not A Good Play While Tech Is Still Dominant

Simplify Asset Management is an innovative ETF manager that offers alternative strategies previously only available to institutional investors.

EQLS: High Yielding Long/Short Equity Fund From Simplify

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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

Simplify Asset Management has expanded its fund lineup with the new Simplify US Equity PLUS QIS ETF (NYSE Arca: SPQ). The fund seeks long-term capital appreciation by overlaying a basket of quantitative investment strategies on top of core U.S. equity exposure.

Simplify's SPQ Adds QIS Overlay to Core US Equity Exposure

SPDR S&P Emerging Markets Dividend ETF

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iShares MSCI China ETF

Chinese real estate behemoth - Country Garden - once thriving, has been facing turmoil lately. This turmoil has the ability to spread contagion in the whole emerging markets space.

China's Country Garden Contagion: ETFs to Lose/Win

Simplify Asset Management has launched the Simplify Multi-QIS Alternative ETF (NYSE Arca: QIS). The new ETF invests in a diversified portfolio of third-party quantitative investment strategies across equities, interest rates, commodities, and currencies.

Simplify Launches Multi-Quantitative Strategy ETF With QIS

Simplify Asset Management announced the launch of the Simplify Opportunistic Income ETF (NYSE Arca: CRDT). The actively managed opportunistic credit ETF focuses on security selection within the high yield, investment-grade, and distressed debt universes.

Simplify Launches Active Opportunistic Credit ETF With CRDT

Simplify Asset Management launched the Simplify Market Neutral Equity Long/Short ETF (NYSE Arca: EQLS) on the New York Stock Exchange. The fund uses a machine learning stock selection model to deliver an equity long/short portfolio.

Simplify Launches Market Neutral Equity Long/Short ETF

NEW YORK--(BUSINESS WIRE)--Simplify launches EQLS, first-of-its-kind ETF, utilizing machine learning stock selection model to deliver modern take on equity long/short portfolio.

News for Simplify Market Neutral Equity Long/Short ETF ETF (EQLS)