New Simplify ETF Offers Exposure to China A-Shares Market

CAS looks to provide a mix of capital appreciation and income for its investors. The fund is actively managed and has a net expense ratio of 0.88%. 

Primarily, CAS allocates the majority of its assets toward either China A-shares or alternatives with similar characteristics to China A-shares. China A-shares are equities of China-based companies, and traditionally are mostly only available to mainland citizens. 

To generate exposure to China A-shares, the fund uses total return swaps. Through doing so, CAS looks to curate a portfolio that broadly reflects where the China A-shares market currently sits. The fund also holds a tactical selection of individual stocks to help bolster its risk/reward profile.

From there, CAS may allocate up to 20% of its net assets into an option strategy. This strategy writes spreads on a variety of ETFs and ETPs. By doing so, the fund can help bolster returns through a diversified means. This also allows CAS to offset any potential losses that the China A-shares market may be incurring at the time. 

“We’re very pleased to be adding China A shares to our growing roster of ‘PLUS Income’ ETFs,” said David Berns, CIO and co-founder of Simplify. “We’re equally excited about the means through which we are delivering this exposure. The coming year is likely to bring with it heightened geopolitical tensions, including between the U.S. and China. By accessing A share performance via total return swaps, investors do not face the possibility of their capital being locked up in the event of sanctions or other actions that may make A share equities themselves untradeable or otherwise inaccessible.”

CAS helps investors access the extensive experience that Simplify’s portfolio management teams can offer. The firm currently has more than 30 ETFs listed in the United States. These funds account for well over $6 billion in assets under management. 

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