AGGH ETF

NEW YORK--(BUSINESS WIRE)--Simplify announced today that it expects to deliver capital gains distributions across six Simplify ETFs.

With the Fed recalibrating its monetary policy, it is time for fixed income investors to recalibrate their allocation to bonds to take advantage of this easing cycle. The Simplify Aggregate Bond ETF is a yield-enhanced version of the Bloomberg U.S. Aggregate Bond Index, which seeks a higher yield while also a higher total return with a similar risk profile. Investors looking for broad fixed income exposure in a core bond portfolio with the potential for enhanced yield and seeking higher total return with a similar risk profile to the U.S. Aggregate Bond Index should consider AGGH.

AGGH aims to maximize total return through investment-grade bonds and option overlays, and has outperformed aggregate bond indices. Performances, however, can be unpredictable and positions in the fund will expose you to other markets that you may be unaware of. I rate AGGH a Hold. This should be a bond yield enhancer that you hold according to your trust in the fund managers.

AGGH has performed better than AGG since its inception in 2022. The fund is actively managed and employs various strategies to enhance its performance. Despite a significant decline in April, this article examines why it could present a good buying opportunity.

Simplify Aggregate Bond ETF is an actively managed investment-grade bond ETF. AGGH uses derivatives and leverage and has a high turnover. An overview of the fund follows.

Simplify Aggregate Bond ETF offers bond exposure with reduced risk through hedging mechanisms and active management. The AGGH ETF's portfolio includes bond ETFs, hedging mechanisms such as covered calls and protective puts, and credit default swaps. AGGH has outperformed its benchmark and offers a high distribution yield, but its complexity and high portfolio turnover may not appeal to all investors.

Simplify Aggregate Bond ETF aims to replace traditional core bond ETFs by using tools such as leverage, options, and futures to enhance yield. The fund's complex composition of ETFs and derivatives comes with a significant amount of leverage and risk involved. AGGH has beaten the index on several important measures, including total return and standard deviation.

Simplify Aggregate Bond PLUS Credit Hedge ETF is marketed as a core bond fund with a credit hedge overlay. However, the fund's holdings and trading suggest it is an unconstrained fixed income hedge fund that trades based on the manager's views on duration and credit. The fund's distribution yield of 10%+ may not be sustainable and does not appear to be supported by income and earnings.