All this talk of Capital Efficient ETFs has led me to create a new test portfolio: the Capital Efficient Golden Butterfly (CEGB). It’s 40% NTSX, 25% GDE and 35% RSBT, profitable but still diversified, with 75% in additional leverage. Backtests are awesome - can’t wait to watch its progress!
Two emails from readers prompt a query: can using 2X Leveraged Gold ETFs improve a portfolio? If so, what to use in the created space? I get behind the wheel to backtest some possibilities. 1st take: 2X Leveraged Gold holds promise; 2nd take: Managed Futures are perhaps the best complement.
This Risk Parity-esque portfolio compares favorably to the Classic 60/40 in terms of both return (slightly higher expected returns) and in terms of volatility (29% reduction in standard deviation). A great portfolio for those who prize stability above all.
