Simplify Asset Management has launched the Simplify Market Neutral Equity Long/Short ETF (EQLS) on the NYSE. This ETF utilizes a machine learning stock selection model to create an equity long/short portfolio. EQLS invests in baskets of global equities through total return swaps, which provide the returns of a basket of common stocks. The fund employs a multi-factor quantitative ranking system powered by machine learning to select the companies for these baskets.
Through the total return swaps, EQLS achieves an equity exposure of approximately 200% long on stocks with positive performance factors and 200% short on stocks with negative performance factors. The fund also incorporates a dynamic de-leveraging strategy to mitigate severe drawdowns, setting it apart from other market neutral approaches.