Simplify Intmdt Term Trs Futs Stgy ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy merits an Average Process Pillar. 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 organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including modest portfolio manager turnover but is held back by portfolio managers with limited tenures at the firm.

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 Intmdt Term Trs Futs Stgy ETF earns an Average Process Pillar rating.    The most significant 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 strengthens the process. With three portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

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


The investment seeks to provide total return that matches or outperforms the performance of the ICE U.S. Treasury 20+ Year Index on a calendar quarter basis.  The fund is an actively managed ETF that seeks to provide total return that matches or outperforms the performance of the ICE U.S. Treasury 20+ Year Index for a calendar quarter, not for any other period. Under normal circumstances, the fund invests at least 80% of its net assets 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.

 This strategy has a 4.3% 12-month yield, higher than its average peer's 4.0%. Typically, higher yields come at the cost of higher credit risk.

Average

Process

Simplify Intmdt Term Trs Futs Stgy ETF earns an Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. The combined average three-year excess return of each manager also strengthens the rating. It suggests that the funds they manage have exceeded the average manager. 


Portfolio managers have made only a small personal investment in the fund, with the maximum investment by any one manager being less than $10,000. That isn't sufficient to align their interests with those of the strategy's investors.

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 Risk Parity Treasury ETF

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