Simplify Launches Treasury Futures Strategy ETF, TUA

TUA, which begins trading on the New York Stock Exchange today, targets the duration of the ICE 10-Year US Treasury Index by investing in Treasuries and Treasury futures at the short end of the curve. The fund is similar in strategy and approach to the Simplify Risk Parity Treasury ETF (TYA C), which Simplify launched in September 2021, with the difference being that TUA focuses on Treasuries and Treasury futures at the short end of the curve, rather than the intermediate. However, TUA can potentially create more efficient intermediate-duration exposure by capitalizing on favorable roll yields at the short end of the Treasury curve.

“We’re pleased to be adding TUA to our fund lineup and see a number of key use cases, particularly in the current environment,” said David Berns, co-founder and CIO of Simplify, in a news release. “Given its levered exposure to short-term Treasuries, TUA can be used to gain short duration exposure with only a fraction of the capital required by an unlevered position, significantly increasing capital efficiency. It can also be used as the building block in a variety of innovative portfolio solutions, including risk parity.”

TUA and TYA are part of Simplify’s ETF lineup, which includes the Simplify Interest Rate Hedge ETF (PFIX B) and the Simplify High Yield PLUS Credit Hedge ETF (CDX ), along with two other recent additions to the firm’s fixed income suite, the Simplify Stable Income ETF (BUCK B) and the Simplify Enhanced Income ETF (HIGH B+), both of which launched on October 27.

“Simplify continues to bring sophisticated fixed income strategies to advisors through easy-to-implement ETFs that are reflective of the rapidly shifting market environment,” said Todd Rosenbluth, head of research at VettaFi.

For more news, information, and strategy, visit VettaFi.