Today, Simplify Asset Management unveiled its latest fund, the Simplify Currency Strategy ETF (FOXY).
FOXY uses a foreign currency strategy to provide capital gains for its investors. The fund is actively managed and has a net expense ratio of 75 basis points.
Primarily, FOXY generates exposure through a variety of investment instruments. This includes foreign currency forward contracts, futures, and forward swaps. By using these instruments, the fund aims to provide exposure similar to direct investments in these currencies.
G-10 and Emerging Markets Exposure
The fund utilizes a two-pronged approach in order to meet its investment goals. These strategies focus on trying to gain currency exposure in two distinctly different markets.
First, the fund will apply its foreign currency strategy to gain exposures to a number of G-10 currencies. Some of these will be held long, while others will be held short.
Meanwhile, FOXY will also employ its investments towards gaining exposure to emerging market currencies. Similarly to the G-10 strategy, some EM currencies will be held long, while others will be shorted.
“Historically, currency-focused ETFs have been passive vehicles and have largely focused on the movements of a single currency in relation to the U.S. dollar. But sophisticated institutions, hedge funds, and other large investors have long known the powerful role that an active carry strategy can play in managing currency exposure and tapping into sources for uncorrelated returns,” noted David Berns, CIO and Co-Founder of Simplify. “With FOXY, investors and advisors now have a single-ticker solution to implement currency carry trades in their own portfolios and they can do so via the liquid, transparent ETF structure.
Within its fund portfolio, Simplify ETFs offers a wide mix of valuable strategies for its investors. One of its largest funds, the Simplify Managed Futures Strategy ETF (CTA ), has well over $600 million in assets under management.
For more news, information, and strategy, visit ETFDB.
