Simplify Asset Management has launched the Simplify China A Shares PLUS Income ETF (CAS), an actively-managed fund targeting capital appreciation while providing additional income through an options overlay strategy. The fund offers exposure to small, mid, and large-cap Chinese mainland-listed companies through total return swaps.
The innovative structure using swaps, rather than direct equity ownership, protects investors from potential capital lock-up during geopolitical tensions. The swaps are designed to track A share equity indices while potentially offering better performance than physical shares due to favorable funding rates.
The fund's risk-managed options overlay involves selling put spreads on various instruments, including equity, fixed income, commodity indices, and ETFs, aiming to generate additional income without requiring extra capital investment. This approach represents Simplify's strategy to provide more resilient China exposure while addressing current investor income needs.