Simplify's New Active ETF Targets Energy And Infra Credit, Offers Monthly Income

While investors keep searching for yield amid an unsettled interest rate environment, a new ETF seeks to stake out territory in a segment of the market too often dominated by equity-oriented strategies.

Simplify Asset Management, on Wednesday, debuted the Simplify Kayne Anderson Energy and Infrastructure Credit ETF KNRG, an actively managed vehicle targeting income-producing credit securities aligned with energy and infrastructure firms.

KNRG will invest in a combination of bonds, notes, loans, and hybrid or preferred securities with a target of providing monthly income. Per Simplify, the credit instruments owned by KNRG have traditionally shown a lower rate of defaults relative to comparably rated non-energy or infrastructure debt, a further layer of attractiveness for investors looking for stability within greater market turbulence.

Also Read: REX Financial Unveils NVDA-Centric ETF, NVII, Balancing Growth And Income

Mike Schimmel, portfolio manager with Kayne Anderson, the firm actively managing the ETF, said that KNRG provides a unique and attractive income-oriented credit product that’s long been only available in private markets.

The timing of the introduction draws on increasing investor demand in sectors supported by structural and policy-driven momentum. David Berns, Simplify’s co-founder and chief investment officer, cited reshoring, government spending on public infrastructure, and the rapidly accelerating digitization of the economy, all of which demand robust energy infrastructures, as primary drivers of opportunity.

“We have sought to build a product that provides a source of attractive monthly yield based on a portfolio overseen by a best-in-class manager,” Berns said.

Through its integration of institutional acumen and consumer accessibility, KNRG comes to the market as a specialist strategy looking to leverage the changing financial structure underlying America’s industrial foundation.

Read Next:

• China Tech’s Revival Starts With Alibaba: ETFs To Watch As The Dragon Wakes