The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Simplify US Equity Plus Qis ETF to a Morningstar Medalist Rating of Neutral.  Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the second-highest 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 earns 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 low portfolio manager turnover but is held back by portfolio managers with limited tenures at the firm.

Analyst Rating

Simplify Exchange Traded Funds - Simplify Multi-QIS Alternative ETF

iShares Core S&P 500 ETF

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Simplify US Equity Plus QIS ETF earns an Average Process Pillar rating. 

The primary contributor to the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also bolsters the rating. With four portfolio managers, the fund is reasonably well-resourced. 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 achieve long-term capital appreciation.  The fund invests at least 80% of its net assets in equity securities of U.S. entities. The advisor defines equity securities as common stock, preferred stock, and futures on common stock. Additionally, the advisor defines U.S. entities as those organized in the U.S.; having a class of securities whose principal securities market is in the U.S.; or deriving more than 50% of its total revenues or earnings from goods produced, sales made, or services provided in the U.S., or maintaining more than 50% of its employees, assets, investments, operations, and or other business activity in the U.S. 

 The portfolio has allocations in its top two sectors, technology and communication services, that are similar to the category. The sectors with low exposure compared to category peers are industrials and financial services; however, the allocations are similar to the category. The strategy has only reported a handful of holdings, and is in a category where the typical fund has approximately 49.5% of assets concentrated in the top 10 holdings.

Average

Process

Simplify US Equity Plus QIS 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 weakened by the experience of the management team, which averages five years at this fund. The number of months that the management team has been running this vehicle together also holds the rating back. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


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, indicating that their risk-adjusted returns have underperformed the category average. Paul Kim draws on a supporting cast of three additional listed managers. Together they average five years of 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

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 US Equity PLUS QIS ETF

SPQ is an actively managed fund seeking to achieve long-term capital appreciation. The fund combines core US equities with alternative exposure to multiple quantitative investment strategies, attempting to enhance both absolute and risk-adjusted returns.

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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

NEW YORK--(BUSINESS WIRE)--Simplify launches US Equity PLUS QIS ETF (SPQ). Provides 100% exposure to U.S. equities, 50% exposure to diversified quant strategies via QIS ETF.

Simplify Adds a Multi-Quantitative Investment Strategy Overlay to Core U.S. Equity Exposure With the Launch of the SPQ ETF

News for Simplify US Equity PLUS QIS ETF ETF (SPQ)