The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements
arising from rising long-term interest rates, and to benefit from market stress
when fixed income volatility increases, while providing the potential for income. The fund holds a large position in over-the-counter (OTC) interest rate options
intended to provide a direct and transparent convex exposure to large upward
moves in interest rates and interest rate volatility. Using OTC derivatives, usually only available to institutional investors, PFIX is
designed to be functionally similar to owning a position in long-dated put options
on 20-year US Treasury bonds. Since the option position is held for an extended
period, the ETF provides a simple and transparent interest rate hedge.