The Most Fun She’s Ever Had at Market Close

UCLA Anderson’s own Professor Andrea Eisfeldt recently experienced the distinction — and the enjoyment — of ringing the close-of-market bell on the Chicago Board Options Exchange, known as Cboe.

“That was the most fun I’ve ever had at market close!” Eisfeldt wrote on LinkedIn. “Even better in my hometown of Chicago and with the amazing team at Simplify.”

Simplify Asset Management Inc. is a registered investment adviser, and Eisfeldt, the Laurence D. and Lori W. Fink Endowed Chair in Finance at UCLA Anderson, happens to be the force behind two of the company’s new exchange-traded funds. Eisfeldt’s research on intangible assets resulted in Simplify Next Intangible Value Index ETF NXTV and Simplify Next Intangible Core Index ETF NXTI, which join a Simplify fund lineup that has now passed the $4 billion AUM mark. Her work exemplifies how academic research can be directly applied in industry.

“Modern firm values are built on intangibles,” says Eisfeldt. Intangible assets include computer software, brands, trademarks, patents, import quotas and other variously definite and indefinite assets, such as the goodwill resulting from a merger or acquisition. Fifty years ago, intangible assets as a category were rather disparaged and they constituted only 17% of the market. Since then, they exceed 90% of total assets on balance sheets. As reported in UCLA Anderson Review, Eisfeldt’s research demonstrates that changes in the economy over the last 50 years might be better understood if we had a stronger grasp of the properties of intangible assets and their impact on firms. And intangibles can help explain recent macrotrends in the economy, such as wealth and income inequality.

In an announcement about the new ETFs, Simplify explained that “the index underpinning NXTV, the NEXT Intangible Value Index, starts with the same universe of 2,000 U.S. equities but, using a ratio of market capitalization to intangible-adjusted book value, arrives at a portfolio of 200 stocks. The NEXT Intangible Value Index modernizes value investing by including intangible assets in the anchor used to determine ‘value.’”

The Simplify team and guests from Collaborative WIM (Women in Investment Management) gathered for a series of discussions about ETFs, options trading and managing volatility that culminated in the bell-ringing commemorating the launch of the indices Eisfeldt created. A University of Chicago Ph.D. and a former associate professor of finance at Kellogg School of Management, Eisfeldt gave a warm shout out to her UCLA and Northwestern students.