NEW YORK, NY – Investors seeking uncorrelated returns to their portfolios may find the Simplify Market Neutral Equity Long/Short ETF an intriguing option. This ETF offers unique risk-reduction features not commonly found in other leveraged funds.

Market-neutral funds aim to neutralize exposure to stock market movements, generating returns based on outperformance and underperformance relative to the market. This is achieved by taking long positions in one asset and short positions in another. For example, investors might buy shares of one company while simultaneously shorting shares of another, with the net return coming from the outperformance of the long position.

One way to achieve market neutrality is by being dollar neutral or beta neutral. Dollar neutrality involves maintaining equal dollar amounts of both long and short positions, while beta neutrality balances the leveraged movements of a stock compared to the overall market.

Simplify’s approach involves creating a beta-neutral portfolio, where the goal is to balance the beta of the long and short positions, not the actual dollar amounts. This strategy can be amplified using leverage to increase returns, but it also comes with increased risk.

One of Simplify’s risk reduction features is dynamic exposure management, which adjusts leverage based on market conditions. For example, if the fund experiences a drawdown, leverage is reduced to decrease risk. Conversely, if the fund starts generating positive returns, leverage can be increased again.

Investing in market-neutral funds like EQLS can potentially provide protection during market downturns and offer alternative sources of returns that are less correlated to traditional market performance. However, as with any investment, there are risks to consider, such as potential losses on both long and short positions simultaneously.

In conclusion, for investors looking to diversify their portfolios and explore alternative sources of returns, EQLS presents a compelling option. With its responsible approach to leverage and risk management features, the ETF offers a unique opportunity to potentially enhance returns while mitigating downside risk.