A new class of ETFs with unprecedented concentration and a nuanced options strategy gives bullish investors a convenient way to bet big on their winners while also holding some potential downside risk mitigations.
SAN FRANCISCO -- Silicon Valley boutique investment firm Volt Equity (voltequity.com) and Simplify Asset Management (simplify.us) have partnered together to offer four new thematic ETFs that focus on companies at the forefront of disrupting or creating new industries:
$VCAR: Robocar Disruption & Tech ETF (hyper-concentrated on: Tesla)
$VFIN: Fintech Disruption ETF (hyper-concentrated on: Lemonade and Square )
$VCLO: Cloud & Cybersecurity Disruption (hyper-concentrated on: Crowdstrike and Cloudflare)
$VPOP: Pop Culture Disruption ETF (hyper-concentrated on: Snapchat and Spotify)
As today’s Robinhood-era investors start straying from their conservative investments in big index funds and start playing the stock-picking game, the more bullish ones start turning to options trading. But many get burned or discouraged as the complexity of calls, puts, experies, & greeks escalates quickly and often brings more risk than many are willing to take on.
Enter the recently launched Simplify-Volt suite of ETFs. This new class of hyper-concentrated ETFs does the hard work of blending stocks and calculated call options that lets bullish investors bet big on just 1-2 names while also potentially hedging with a sizable allocation to a diversified tech index and strategically chosen put options.
“We believe that concentrated, professionally managed ETFs are an attractive alternative to single stock or options for many investors,” says Paul Kim, co-founder of Simplify Asset Management.
Each Simplify-Volt ETF has the highest exposure to their anchor names than any other ETF currently out there. And by a landslide. For example: $VCAR has 25% Tesla exposure whereas the next most Tesla-exposed ETF currently has ~16%. However, with the Tesla call options, VCAR’s combined notional exposure to Tesla is actually >125%, making this a uniquely concentrated ETF.
Tad Park, CEO of Volt Equity, said: “$VCAR is all in on Tesla. We didn’t want to include other names because we believe Tesla is years ahead of the competition in rolling out full autonomous vehicles. We wanted to launch a fund that reflected our convictions.”
It’s clear that Volt’s convictions aren’t born out of whimsical fads, but grounded in deep and thoughtful technical research (see “Why LiDAR is Doomed” by Volt Equity). All of this makes Volt’s innovative new class of ETFs ones worth keeping an eye on, especially for bullish investors looking for a way to potentially amplify their favorite company’s run-ups via options.
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Volt Equity LLC is a Registered Investment Adviser started by CEO and founder, Tad Park, in 2020 to explore and implement novel investment strategies. By approaching investment with an eye toward identifying disruptors leading innovations, Volt seeks to provide a wide range of strategies and products to help investors invest in the future. For more information, visit www.voltequity.com.
Simplify Asset Management Inc. is a Registered Investment Adviser founded in 2020 to help advisors tackle the most pressing portfolio challenges with an innovative set of options-based strategies. By accounting for real-world investor needs and market behavior, along with the non-linear power of options, our strategies allow for the tailored portfolio outcomes for which clients are looking. For more information, visit www.simplify.us.
Investors should carefully consider the investment objectives, risks, charges and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF’s prospectus containing this and other important information, please call (855) 772-8488, or visit voltfunds.com. Please read the prospectus carefully before you invest. An investment in the fund involves risk, including possible loss of principal. Past performance does not guarantee future results.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments.
The funds are new and have a limited operating history.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
An investment in the fund involves risk, including possible loss of principal.
Disruptive Innovation Risk. Companies that the adviser and sub-adviser believe create and capitalize on disruptive innovation and developing technologies to displace older technologies or create new markets may not in fact do so. Companies that initially develop a novel technology may not be able to capitalize on the technology. The Fund may invest in a company that does not currently derive any revenue from disruptive innovations or technologies, and there is no assurance that a company will derive any revenue from disruptive innovations or technologies in the future.
Distributed by Foreside Fund Services, LLC.
Media contact: David Kim