Simplify Debuts Private Credit Strategy ETF with Built-In Credit Hedge 

Simplify Asset Management has launched the Simplify VettaFi Private Credit Strategy ETF (PCR), designed to give investors access to private credit returns through a liquid, exchange-traded vehicle. The ETF seeks to mirror the performance of the VettaFi Private Credit Index, which is constructed from a universe of business development companies (BDCs) and publicly traded closed-end funds focused on private credit. Index selection is based on market capitalization, trading liquidity, volatility, and yield metrics. 

In addition to tracking the index, PCR incorporates a proprietary hedging overlay. The strategy takes long positions in equities with strong credit characteristics while shorting those with weaker balance sheet profiles. According to co-founder and CIO David Berns, this credit hedge has historically shown a positive correlation to credit spreads while producing consistent positive returns over time. 

“Private credit has seen tremendous growth over the past decade as institutional and high net worth investors have increasingly turned to the category for yield and the powerful role it can play in diversifying a traditional 60/40 portfolio,” said David Berns, CIO and co-founder of Simplify. “However, for most investors, access to this market has typically been limited or marked by high fees, complex tax reporting, and severely limited liquidity.”  

PCR expands Simplify’s lineup of alternative and income-oriented ETFs. In June, the firm launched the Simplify Kayne Anderson Energy and Infrastructure Credit ETF (KNRG), an actively managed strategy investing in credit instruments of energy and infrastructure companies. 

Founded in 2020, Simplify Asset Management operates as a registered investment adviser, focusing on options-based investment strategies for financial advisors and their clients.