Simplify Tara India Opportunities ETF (IOPP)
AI Summary
The fund aims to invest at least 80% of its assets in securities of Indian issuers, including companies organized in India, deriving significant revenues from India, or with major operations in India. It also invests in mutual funds, ETFs, ADRs, and derivatives linked to Indian securities. The fund is actively managed and invests across all market capitalizations.
The managers use a bottom-up stock selection process based on company research, screening for factors like competitive positioning, management quality, growth potential, and valuation models. They seek high-quality companies poised to benefit from India’s growing middle class, economic formalization across sectors, and the government’s manufacturing push, especially in defense, green energy, and exports.
The holdings are monitored for adherence to the original investment thesis by tracking news, results, and fundamental progress. Positions are adjusted based on ability to deliver on the thesis or if more attractive opportunities arise. The portfolio is regularly reviewed to mitigate concentration risk.
Strategy Narrative (Prospectus)
Principal Investment Strategies: Under normal circumstances, the Fund invests at least 80% of its assets (plus any borrowings for investment purposes) in securities of Indian issuers. The Fund defines Indian issuers as entities: (i) organized in India; (ii) having a class of securities whose principal securities market is in India; (iii) deriving more than 50% of total revenues or earnings from goods produced, sales made, or services provided in India; or (iv) maintaining more than 50% of its employees, assets, investments, operations, or other business activity in India. The Fund also defines mutual funds and ETFs that invest primarily in securities of Indian issuers; as well as ADRs, GDRs, participatory notes on securities of Indian issuers, and any swap contract linked to the preceding, as securities of Indian issuers. The Fund is actively managed and invests in companies without restriction as to capitalization, including micro-capitalization companies. Security Selection Process In selecting securities for the Fund, the portfolio managers use a bottom-up selection process instead of following a top-down approach. Potential investments are identified through: (1) Company-specific research and analysis conducted by the portfolio managers; and (2) Screening techniques starting with a universe of 800-1000 stocks using multiple factors that include an evaluation of a companys competitive positioning, management, future growth potential, and track record in terms of performance. Companies are further screened with key performance indicators (KPIs), model building, and valuation. The portfolio managers aim to capture Indias growth story by taking a long-term approach and investing in what they believe to be high-quality companies that offer the potential for long-term growth and capital appreciation. The portfolio managers attempt to construct a portfolio of companies positioned to benefit from three key themes that are playing out in India across various sectors: (1) growing middle class consumer with increasing income levels; (2) formalization across sectors leading to increased economic participation; and (3) increasing government focus on promoting manufacturing with a focus on defence, green energy, and exports. Monitoring Process The securities are monitored to confirm adherence to the original investment thesis. The monitoring process consists of tracking news and analysing quarterly results to ensure that a companys fundamental progress ties in with the investment thesis. The Fund may increase or decrease its position in a particular company based on such companys ability to deliver on its original investment thesis. The portfolio is regularly monitored to avoid any over-exposure to any single stock or industry which helps to avoid concentration risk and achieve the benefits of diversification. The Fund may sell a security if, based on the portfolio managers research, a companys prospects for growth have declined or the portfolio managers have identified a more attractive investment opportunity. The Funds 80% policy may be changed by the Board of Trustees upon 60 days written notice to shareholders.