Simplify Asset Management launched its latest income-oriented fund, the Simplify Ancorato Target 25 Distribution ETF (NYSE:XXV) on Tuesday, with one of the most ambitious payout objectives in the ETF market: a 25% annualized distribution, paid monthly.

It aims to reach that ambitious income level by selling barrier put options linked to single stocks, as well as "worst-of" baskets whose payouts depend on the poorest performer in a selected set. The barriers are continually adjusted to help XXV reach its monthly distribution target.

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Dave Berns, co-founder and chief investment officer at Simplify, explained that to address investor demand for income solutions that balance yield and risk, XXV brings structured investing into a transparent ETF format, offering the potential benefits of barrier income strategies without the limitations of traditional structured notes.

Ancorato Capital, an expert in structured products, will sub-advise XXV. The ETF joins the fast-expanding suite of barrier-income offerings from Simplify, which followed the recent launches of Simplify Barrier Income ETF (NYSE:SBAR) and Simplify Target 15 Distribution ETF (NYSE:XV).

The family of funds aims to bring the payoff profile of structured products, but without bank credit risk, illiquidity, or complex compliance burdens. The ETFs offer continuous liquidity and seamless rollovers into new option “vintages,” enabling investors to capture option-based income in a more flexible wrapper.

“It's clear that investors have a desire for smarter ways to generate income in an environment where traditional fixed income is challenged,” said Berns.

Simplify positions XXV as a response to investors’ ongoing hunt for yield as traditional bond markets deliver muted real returns.

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