The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Simplify Short Term Trsy Futs Strat 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 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 is industry standard, albeit with some strong attributes like high portfolio manager retention, but is held back by portfolio managers with limited tenures at the firm. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. Simplify Short Term Trsy Futs Strat 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 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 five years at this fund.

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


The investment seeks to provide total return, before fees and expenses, that matches or outperforms the performance of the ICE U.S. Treasury 7-10 Year Bond Index on a calendar quarter basis. The fund does not seek to achieve its stated investment objective over a period of time different than a full calendar quarter.  The fund invests primarily in futures contracts, call options, and put options on U.S. Treasury futures, U.S. government securities, such as bills, and notes and bonds issued by the U.S. Treasury or fixed income ETFs that invest in U.S. Treasuries. The fund will hold cash and cash-like instruments or high-quality short term fixed income securities.

 This strategy has a 4.7% 12-month yield, higher than its average peer's 3.6%. Typically, higher yields come at the cost of higher credit risk.

Average

Process

Simplify Short Term Trsy Futs Strat 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 instability of its management team also holds the team back. The fund last saw a manager change four months ago.


The strategy is backed by Paul Kim, the longest-tenured manager, who has been a listed portfolio manager for nine years. 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. The team is small but adequately equipped, with two other supporting listed managers. Together, the three boast 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

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 Short Term Treasury Futures Strategy ETF

TUA seeks to match or outperform an intermediate-term US Treasury index for a calendar quarter, through an actively managed portfolio of futures, call and put options on US treasury futures, US government securities, and ETFs. 

The Simplify Short-Term Treasury Futures Strategy ETF is a levered bet on lower short-term interest rates. The TUA ETF may face headwinds as the American economy appears stronger than expected, potentially delaying or reducing interest rate cuts by the Federal Reserve. Since 2-year yields are closely tied to the Fed's monetary policies, if the Fed cuts less than 3 times, then 2-year yields may rise, pressuring the TUA ETF.

TUA: When Facts Change (Rating Downgrade)

The TUA ETF is a leveraged bet on declining short-term interest rates. Expectations for the first rate cut have been pushed back, resulting in an increase in 2-year yields and losses for the TUA ETF. Despite the recent losses, investors should not bail on the TUA ETF as current 2-year yields now are consistent with the Fed's projections.

TUA: Higher For Longer Redux?

I covered TUA last April and a reader has asked for an update since interest rates are expected to decrease in 2024. TUA invests in short-term treasury futures. It aims for similar risk to medium-term treasuries, but with higher yields and returns. Although the fund has failed to live up to its potential in the past, the future looks rosier.

TUA: Treasury Futures ETF, 4.9% Yield, Positive Prospects

Simplify recently released a deep dive video, confirming my prior understanding of the fund. The Fed recently suggest peak short-term rates have been reached. Looking forward, TUA looks fairly priced in a 'soft landing' scenario. However, there is upside in a 'hard landing' scenario. Given attractive risk/rewards, I am raising the TUA to a buy.

TUA: Revisiting Post December FOMC, Upgrade To Buy

Simplify Aggregate Bond Plus Credit Hedge ETF

Simplify Stable Income 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 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

The Simplify Short Term Treasury Futures Strategy ETF aims to match or outperform the ICE US Treasury 7-10 Year Bond Index through leveraged long positions in 2-Year treasury futures. The ETF has lagged behind the 7-10 Index in terms of returns, potentially due to differences in the yield curve movements. Unless they are comfortable with this yield curve bet, I recommend investors avoid the TUA ETF.

TUA: Hidden Bet On The Yield Curve

Democracy International Fund

On this episode of ETF Prime, host Nate Geraci speaks with a trio of individuals discussing fixed income, innovative ETFs, and DMCY. His guests include VettaFi's Tom Lydon, who discusses significant topics from the Fixed Income Symposium.

ETF Prime: Lydon on Fixed Income, Plus Innovative ETFs and DMCY

Global X Artificial Intelligence & Technology ETF

IMGP Berkshire Dividend Growth ETF

ProShares Bitcoin Strategy ETF

Amplify Transformational Data Sharing ETF

Global X Robotics & Artificial Intelligence ETF

Vanguard Extended Duration Treasury ETF

iShares MSCI Emerging Markets ex China ETF

Pacer Benchmark Industrial Real Estate SCTR ETF

Global X Lithium & Battery Tech ETF

Invesco WilderHill Clean Energy ETF

First Trust NASDAQ Clean Edge Green Energy Index Fund

VanEck Rare Earth/Strategic Metals ETF

iShares 10-20 Year Treasury Bond ETF

PIMCO 25+ Year Zero Coupon US Treasury Index ETF

Hello! This is markets reporter Isabel Wang bringing you this week's ETF Wrap. In this week's edition, I spoke with CFRA's Aniket Ullal, head of ETF data and analytics, about thematic ETF ideas and investment categories for the second half of 2023.

Here are ETF themes and categories investors may want to consider in the second half of 2023

WisdomTree Bloomberg Floating Rate Treasury Fund

Angel Oak Ultrashort Income ETF

In this week's edition of the ETF Issuer League, it's State Street that has taken a big leap forward. The megafirm's ETF AUM hit $1 trillion in total AUM via price and flows influence.

ETF Issuer League: State Street, WisdomTree Up

Capital Group Growth ETF

Dimensional US Core Equity 2 ETF

iShares Russell 2000 ETF

In this week's edition of the ETF Issuer League, WisdomTree, Dimensional, Simplify, and Capital Group stood out the most. In each of their respective tiers, those firms saw stand-out inflows or surpassed or neared new milestones.

Issuer League: WisdomTree, Dimensional Up

TUA: New Simplify Short-Term Treasury ETF, With A Twist.

TUA: New Simplify Short-Term Treasury ETF, With A Twist

ASML Hld

Breakwave Dry Bulk Shipping ETF

SPDR Bloomberg 1-3 Month T-Bill ETF

Invesco China Technology ETF

iShares MSCI Mexico ETF

WisdomTree Europe Hedged Equity Fund

Quadratic Interest Rate Volatility and Inflation ETF

Vanguard Mega Cap Growth ETF

Invesco QQQ

Invesco Nasdaq 100 ETF

ROBO Global Robotics and Automation ETF

VanEck Vectors Vietnam ETF

Despite increased volatility last month, markets ended the first quarter on a high note. Some of the best ETFs and mutual funds surged.

Stocks, Bonds Continue To Beat 'Severe' Conditions

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

NEW YORK--( BUSINESS WIRE )--Simplify Asset Management (“Simplify”), an innovative provider of Exchange Traded Funds (“ETFs”), today announced the launch of the Simplify Short Term Treasury Futures Strategy ETF (TUA).

News for Simplify Short Term Treasury Futures Strategy ETF ETF (TUA)