Simplify Asset Management has launched a new ETF aimed at giving U.S. investors access to Chinese commodity markets without the complexities of taxes typically associated with futures-based strategies.
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Access To China’s Commodity Markets Without A K-1
The Simplify Chinese Commodities Strategy No K-1 ETF (NYSE:CCOM) is designed to provide diversified long and short exposure to commodity futures traded on major Chinese exchanges, including those in Shanghai, Dalian and Zhengzhou. The fund uses a structure that bypasses the issuance of a Schedule K-1, a feature that may appeal to investors seeking simpler tax reporting.
CCOM is built on a systematic long/short managed futures strategy developed by Altis Partners. The approach seeks long-term capital appreciation through investments in commodity-linked swaps and futures tied to more than 30 China-based commodity markets.
By focusing specifically on contracts traded on Chinese exchanges, the fund aims to offer diversification benefits for portfolios heavily skewed toward U.S.-centric commodities.
Simplify said China represents one of the world’s largest and most influential commodity markets, yet many of its futures contracts remain difficult for U.S. investors to access directly. The firm positions CCOM as a way to tap into commodity exposures that may behave differently from traditional U.S.-based benchmarks, potentially enhancing diversification.
The strategy combines two core models. A primary model analyzes price movements across multiple time horizons, while a secondary model is intended to help offset periods when trend-following strategies struggle. In addition, the fund dynamically manages futures curve positioning to account for contango and backwardation, factors that can materially impact returns in commodity markets.
CCOM expands Simplify’s existing lineup of commodity-focused ETFs. It joins the Simplify Commodities Strategy No-K1 ETF (NYSE:HARD), which applies a similar thought of long/short managed futures, but focuses on global commodity markets rather than China-specific ones.
Photo: ImageFlow via Shutterstock
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