Simplify ETFs has announced the launch of the Simplify Bitcoin Strategy PLUS Income ETF (MAXI), which is the first fund to offer exposure to Bitcoin (BTC-USD) while also including an income component.
The fund is generally intended to follow Bitcoin price changes, but also contains an income component generated by selling short-term buy or sell spreads on the world’s most liquid equity indices.
According to the fund’s factsheet, it aims to target 100% exposure to Bitcoin by investing in the first-month CME futures contract. Meanwhile, on the income side, an option writing algorithm selects the type of option, the underlying and the strike price with the aim of generating attractive risk-adjusted returns.
Detailing in more detail how the fund works, Simplify ETFs said MAXI includes a second level of risk control that aims to mitigate the extreme risks associated with writing options.
MAXI is listed on the Nasdaq and has a gross spend rate of 0.97%.
Simplify CEO Paul Kim said, “Whatever directional call an investor may want to make on Bitcoin, MAXI can play a key role, as the income component of the fund can help add to returns at the upside while also acting as a downside hedge under the “padding” these revenues may generate during potential drawdowns for Bitcoin.
In broader financial news, major averages reversed on Friday as PCE price index data rose more than forecasters had expected for August.