Simplify Target 15 Distribution ETF (XV US) - Portfolio Construction Methodology

Core Insights - The Simplify Target 15 Distribution ETF aims to generate monthly income through a combination of short-duration U.S. government bonds and income-oriented option spread strategies on equity indexes and ETFs [1] Group 1: Investment Strategy - The fund primarily invests in U.S. Treasury bills, notes, and bonds, as well as fixed income ETFs that hold similar securities [1] - The interest-rate sleeve is managed toward an average duration of two years or less, with a focus on maximizing yield within that constraint [1] - The adviser employs partially hedged put spreads using over-the-counter options, swaps, and forwards on large-cap, growth, and small-cap equity references [1] Group 2: Target Distribution and Risk Management - The strategy targets an aspirational annualized distribution rate of 15% [1] - Option strikes, maturities, and notionals are selected using a proprietary risk framework, with positions adjusted as options mature or after significant movements in reference assets [1]