Bond-market veteran Harley Bassman’s escalating legal fight with Simplify Asset Management is raising a broader question for the rapidly evolving ETF industry: who owns the economics of an investment strategy when an individual creates the idea but an asset manager turns it into a fund?
Bassman, creator of the widely followed MOVE Index, sued Simplify earlier this year, alleging the ETF issuer failed to honor revenue-sharing arrangements tied to products he helped develop. Simplify has disputed the allegations and sought to move the dispute to arbitration, Bloomberg reports.
The dispute is particularly notable because Bassman was not simply a portfolio manager at Simplify. The firm recruited him in 2021 as a managing partner, highlighting his expertise in derivatives, structured products and fixed-income strategies.
Bassman alleges that his agreement entitled him to 60% of Simplify Interest Rate Hedge ETF‘s (NYSE:PFIX) net revenue while he was employed by Simplify and 25% after his departure. He also claims a separate agreement entitled him to 20% of the revenue from Simplify MBS ETF (NYSE:MTBA), the mortgage-backed securities ETF whose strategy Simplify explicitly described as being created by Bassman.
PFIX, Simplify’s Interest Rate Hedge ETF, currently has about $184 million in assets, while MTBA has grown to roughly $1.4 billion, making it one of the firm’s largest ETFs.
That growth shows why the economics of the arrangements matter. MTBA alone has accumulated nearly $1.4 billion since launching in November 2023. At its current 0.15% net expense ratio, that equates to roughly $2.1 million a year in fund fees.
The dispute also has a striking timeline. Bassman says his lawyers approached Simplify in November 2025 seeking to resolve the payment issue. Days later, Simplify filed SEC documents removing him as portfolio manager from five funds, including MTBA and PFIX.
A New ETF Intellectual-Property Problem
The case comes as ETF issuers increasingly move beyond plain-vanilla index tracking into options, derivatives, active management and alternative strategies.
That shift makes investment intellectual property more valuable. A fund’s competitive edge may increasingly come from a proprietary model, trading framework or portfolio-construction methodology developed by a particular individual rather than from the ETF wrapper itself.
It comes down to one question. If a strategy becomes a billion-dollar ETF, who owns the value created by the original idea?
The answer could have implications well beyond Bassman and Simplify. As asset managers increasingly recruit hedge-fund managers, derivatives specialists and other investment experts to launch differentiated ETFs, contracts around strategy ownership, revenue sharing and post-employment rights could become more important.
As ETFs become increasingly commoditized, the intellectual property embedded in their strategies could increasingly become the real differentiator.
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