NEXT Indices ETFs

The Simplify Next Intangible Index ETFs modernize equity investing by incorporating the most powerful asset that companies have: Intangible Capital.

Simplify NEXT Intangible Core Index ETFThe Simplify NEXT Intangible Core Index ETF (NXTI) seeks to provide investment results that track, before fees and expenses, the performance of the NEXT Intangible Core Index. The index will select companies with high intangible capital-to-book asset ratios within their respective sector. The research behind the development of the index supports the idea that companies with high intangible capital-to-book asset ratios outperform companies with low intangible capital-to-book asset ratios over time.

Simplify NEXT Intangible Value Index ETFThe Simplify NEXT Intangible Value Index ETF (NXTV) seeks to provide investment results that track, before fees and expenses, the performance of the NEXT Intangible Value Index. The Index will select companies with low equity valuations relative to their intangible-adjusted book values within their respective sectors. The research behind the development of the index supports the idea that companies with low intangible-adjusted book valuations outperform traditional valuation metrics over time.

Media Links for NXT Indices:

Bloomberg ETF IQ (at minute 17:30)

ETF Prime Podcast

AFO Wealth Management Forward Podcast

Future Proof Panel (Intangible Value discussed starting around minute 10)

Barrons

Anderson Review

Vox EU

Professor Eisfeldt's published research on Measuring Intangibles:

“Organization Capital and the Cross-Section of Expected Returns” (with Dimitris Papanikolaou.)

Amundi Smith Breeden First Place Paper Award 2013.

Journal of Finance, August 2013, 1365-1406.

We develop a measure of firms' intangible assets and form portfolios based on high vs. low intangible asset firms. We find that firms with more intangible assets have risk adjusted returns that are 4.7% higher than firms with less intangibles.

"The Value and Ownership of Intangible Capital" (with Dimitris Papanikolaou.)

American Economic Review, Papers and Proceedings, May 2014, 189-194.

We use a simple model of the sharing rule between key labor inputs and capital owners, along with accounting data, to measure the fraction of the US capital stock which is owned by key labor and thus missing from book and market values.

"Intangible Value" with Edward Kim and Dimitris Papanikolaou.

Critical Finance Review 2022. Volume 11: No. 2 pp. 299-332.

Intangible assets are absent from traditional measures of value, despite their very large (and growing) importance in firms' capital stocks. As a result, the fundamental anchor for value that uses book assets is mismeasured. We propose a simple improvement to the classic value factor (HMLFF) proposed by Fama and French (1992, 1993). Our intangible value factor, HML_INT, prices assets as well as or better than the traditional value factor but yields substantially higher returns. This outperformance holds over the entire sample, as well as in more recent decades in which value has underperformed. We show that this is likely due to the intangible value factor sorting more effectively on productivity, profitability, financial soundness, and on other valuation ratios such as price to earnings or price to sales.

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 SimplifyETFs.com. Please read the prospectus carefully before you invest.

An investment in the fund involves risk, including possible loss of principal.

The fund is subject to the risk that the strategy may not produce the intended results. The fund is new and has a limited operating history to evaluate.

Concentration Risk: The Fund may focus its investments in securities of a particular industry or group of industries.

Small and Medium Capitalization Risk: The earnings and prospects of small and medium-sized companies are more volatile than larger companies and may experience higher failure rates than larger companies.

Value Risk: A company may be undervalued due to market or economic conditions, temporary earnings declines, unfavorable developments affecting the company, and other factors.

Tracking Error Risk: Tracking error is the divergence of the Fund’s performance from that of the Index.

Simplify ETFs are distributed by Foreside Financial Services, LLC. Simplify and Foreside are not related.

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