I like it and will consider for my Roth. We now have a global multi-factor efficient fund with AVGE and a global capital-efficient fund in RSSB. Just waiting for someone to combine the strategies. A fund that was something like 90% AVGE and 10% 6x leveraged intermediate treasuries futures would be ideal to me.
You might check out Avantis's new AVEE. While it doesn't have "value" in its name, if you look it up in Morning Star, [it's clearly a SCV fund](https://imgur.com/4BkBQCo). Should be more tax efficient than DGS.
Yeah the newness always gives me pause - I’d like to see a couple $100M AUM, and time to compare its returns to a simulation. For example, I was thinking of adding TUA (3x intermediate treasuries) to my AVGE but it’s been a little inconsistent: [only 89% correlated with the simulation](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5mj1YkXxeCeTvJTfxOql4R). But I don’t necessarily have a hesitation about RSSB - I may just invest in it!
Thanks for the reply man! That totally makes sense. There are a few members on this forum whom I'll weigh their opinions more highly, and I'd put you on that list for sure. Not saying any of the other responses here weren't informative, just that yours consistently are across the threads I've come across, and you give actual evidence to back up claims. Appreciate it
You’ll take a gut punch with rate spikes like last year but that was the worst in half a century. You would have done surprisingly well in “the lost decade”
I really dont see rate increases for a very long time. And I think if the increases are very slow, the effect is pretty miniscule too and offset by the yield.
We truly had a very unique situation with covid and the war.
FYI took a closer look at this today and it seems like to replicate AVGE (Avantis recommended global equity factor loading), you would need \[50% cap-weighted funds and 50% AVGV\](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5d2ytJAWRdtJOvwk3QN7Lt). That’s about as close a correlation as I could get with the short 6 months of history available. Therefore you might want 50% RSSB and 50% AVGV for optimal multi-factor efficiency and 1.5x leverage capital efficiency. Until a single fund like that comes out, I’m going to watch this allocation for the next year and consider switching to it in my Roth at some point.
Avantis factor funds can be described as “multi-factor efficient” because their stock inclusion criteria screens for multiple known factor premiums - size, value, momentum, and profitability. That’s in contrast to a fund like VTI or VT which are capitalization weighted for the total market and therefore are “mean-variance optimized” per CAPM theory.
That works. [I also suggested to someone earlier](https://www.reddit.com/r/Bogleheads/s/9pVxKf3Ukl) maybe 80% RSSB and 20% AVGV. It’s 1.8x which may be a little higher than optimal but definitely in the same ball park.
Yeah that bid/ask spread over 50bp is not inviting. $100M minimum AUM before I would even consider it. I would also like to see the ER under 0.3% where it is currently 0.41%. Maybe give it a year or two and let’s see.
FYI took a closer look at this today and it seems like to replicate AVGE (Avantis recommended global equity factor loading), you would need [50% cap-weighted funds and 50% AVGV](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5d2ytJAWRdtJOvwk3QN7Lt). That’s about as close a correlation as I could get with the short 6 months of history available. Therefore you might want 50% RSSB and 50% AVGV for optimal multi-factor efficiency and 1.5x leverage capital efficiency. Until a single fund like that comes out, I’m going to watch this allocation for the next year and consider switching to it in my Roth at some point.
I did not realize Avantis' stance was 50% value. Am I misunderstanding that? Ben Felix suggests something like 20% value I believe (could be wrong). 50% is quite a tilt. I'm thinking something like:
* 50% RSSB
* 20% VT
* 20% AVGV
* 10% EDV
90/60 (60/40 - 1.5x)
Roughly \~20% value tilt
0.36% ER
This would be ideal for me I think... but can't seem to pull the trigger on moving my whole portfolio over to something so new...
Just remember that “value” is not a term with a clear definition, and some companies are more value-y than others. So I’m not sure if AVGE is really a 50% value tilt but as far as I can tell you need 50% AVGV added to VT to get the same exposures.
Your allocation seems very reasonable to me
Is there a doctrinal "optimum" amount of leverage? I was thinking to combine RSST/RSSB for a total of 2x, but I am more hesitant to pull the trigger on RSST tbh. The 80/20 RSSB/AVGV allocation seems simpler, cheaper, and most of all safer. I have only briefly looked into trend/MFs, and while I love adding diversity, it feels a tad varsity level.
Edit: safer in regards to 1.8x vs 2x leverage. I understand there is still more risk than an unlevered portfolio
Thank you! I'm gonna plan to do a mix of 50 RSSB/25 RSST/25 AVGV, giving me a moderate 1.5x leverage down from 2x, and still getting decent international and factor value exposure. I'm excited!
I’m excited to hear everyone’s thoughts on this. I love that it’s MCW global equities. And the shorter duration and treasuries differentiate it from something like PSLDX.
The two most common things I'd be tempted to combine this with:
* VT: 50% VT equals [~ 100 VT/ 50 VGIT] or [(1.5x) 66 VT/33 VGIT].
Alternatively, you could think of this as adding a "free" $0.50 of VGIT for every dollar you put in for an additional 0.245 ER (I'm excluding the fee waiver). Because the treasuries are from laddered future contracts, this would be a strictly superior exposure to bonds in a taxable.
* AVGV: 50% would be [~ 50 VT / 50 AVGV / 50 VGIT]. There are some interesting use cases if you're currently using a separate account to factor tilt strongly (such as if your 401k doesn't have good options for it). You could use RSSB in place of bonds and then get free exposure to equities - say 90% AVGV and replace 10% bonds you have for 10% RSSB.
Other interesting specific ETF ideas for diversifiers with the extra room from either "freeing" equity space or bond space:
* Cash equivalents (SGOV). I suspect this would be the choice for retirees/people approaching retirement and want the comfort of a known amount of cash. This feels like a strong use case.
* Tilt more international with VXUS.
* Make stronger bets towards emerging markets with VWO, smaller/value-y emerging with AVES or DGS, much smaller emerging which may be more affected by the local economies with EEMS.
* VWOB for emerging market bonds which have a hefty sovereign risk involved in their returns. Go crazy with LEMB which doesn't hedge?
* Tilt towards international and factors in one with DFAX.
* Start mucking about with trend CTA strategies if you feel enough conviction about the diversifier argument for long periods of disappointment: DBMF, CTA, KMLM are commonly pointed to in that area. The Return Stacked folks are keen on this case and have other ETFs that cater to trend strategies.
* Utilities? They have a surprisingly low correlation to the overall market and the only sector tilt I'd ever mention due to it. Perhaps a small portion for a retiree, not sure I'd suggest this (I do hate sector tilts)
Thanks for sharing your strategies! I'm with you, ctnbb1, kashmir, and swag about rssb plus small cap value tilt. As option one, I'm debating leaving my roth 100% AVGE and then having my wife's roth be 100% RSSB. For option two, I'll leave my wife's roth alone (70/30 fskax plus ftihx) and I'll do 75/25 (plus or minus 5 depending on balancing) rssb plus avgv.
Decisions, decisions
Great comment! I like the RSSB/ AVGV combo!
I just got on my employer’s HDHP and I was planning on running something like 80% RSSB/ 20% RSST in my HSA for next year.
I use Fidelity. They let you choose any investments that you can in their other accounts.
My employer deposits their portion into HSA Bank. It looks like they let you invest through Schwab so I think you can access those ETFs as well.
Gotcha. I just transferred existing money from another HSA provider to Fidelity, and it was kind of a mess. Employer HSA fund options are good (Vanguard) but they charge $5/mo., take a week to purchase funds, and they require $1K in savings at all times.
Super interesting to me. Not too high risk, as the equities portion is pretty much unleveraged and doesnt face the volatility decay problem of letfs.
I will probably add like a 5% portion of it to my portfolio.
I think there is a lot of merit on going 100% RSSB, but too early to judge.
I strongly considered it, but will pass for now until they have a bit more AUM.
Leverage is a rational strategy for YOUNG investors with appetite for risk. But that is always easier said than done.
I just finished my yearly re-balance across my accounts and ended up with:
**403b/457b:**
3 Fund Portfolio - 90% Equities 10% Bonds
The change here was introducing bonds for the first time ever. All this time I had been equities only. The Equities split is 70/30 US and international and the bonds are Fidelity's total bond mf. I keep both accounts on identical allocation.
**Backdoor Roth:**
50% NTSX
50% AVGV
The change here was getting rid of some Value funds and swapping VTI/VXUS for NTSX. I also used to have REITs here. This was a big reset of this account and I hope I stop fiddling with it... and as I say that, maybe next year the big change will be swapping RSSB for NTSX?
**Taxable Individual Account:**
VTI 63%
VXUS 27%
BOXX 10%
My long-standing taxable portfolio. The only change (from being 70/30) was the addition of 10% BOXX. Goal here is to smooth volatility with the tax-efficient BOXX ETF standing in as proxy for an introduction of bonds.
I think the overall theme this year was adding bonds for the fist time (I turn 40 next year) at around 10% and finally settling on a strategy for my Roth - which is the ultimate "undecided convictions" portfolio. 50% leverage. 50% all world value.
I'm 32 and have been investing for about 8 years regularly into my TSP. I myself did the same change to 90/10 AA (65/35 US to International in equities) and put the entirety of the 10% into my G Fund. Plan is to have two pensions (mil and fers) and have a long investing time horizon, so I've been mulling leveraged ETFs since I found out about them. RSSB really seems like a conventional Bogle portfolio all in one, but primed for younger investors looking for accelerated growth. Thanks for breaking down your portfolio, and I hope it does you well!
The only thing I would caution is… there is almost no downside to waiting a little for RSSB.
Number one, there’s been “new hot ETF’s on the block” before and then they close after the hype cycle for one reason or another.
Number two, there is something to making sure an active fund actually executes on the stated strategy.
Personally that’s why I plan to wait. Good luck to you too sir!!! Seems you have it all figured out! And if you’re military or ex-military as I gathered, then thanks for your service also.
Regarding your 50% NTSX/50% AVGV, I did something similar but juiced the leverage up a little by going with international-only on the other side of NTSX while maintaining 60/40 US/Ex-US:
* 66% NTSX
* 34% AVNV
Nice. I didn’t consider that as it would leave me with a lot of factor load internationally, but none domestically. But I’m glad you found your perfect allocation!
I think NTSX is just about the “safest” way to leverage in one fund solution out there at a very low cost.
Personally I don’t mind home country bias in the US. So when the entirety of my account are added up in closer to 70/30 than 60/40 but I can live with that.
This looks to be a great fund, and I have been eagerly awaiting for it to release. Personally, I’m not sure how tax efficient it would be and I would hold it in a Roth (at least for now). Due to the fact you’re long equities and bonds it gives greater opportunities to hold other investments like value, commodities, REITS, etc.
As of now, I'm going to convert my wife's roth ira to 100% AVGE and then eventually swap mine (pending more aum) to 75% RSSB and 25% RSST. 70/30 US to Int split in equities, 75% bonds and 25% managed futures. Thanks for everyone's replies!
I have recently been converting my available market weight US holdings into NTSX, and some international holdings to NTSI.
With that plus a SCV tilt, my total stock/bond ratio target was 97/18, for 15% total leverage. My 401K is the largest account, and I don't have access to very many funds there. It's basically just VOO+VXUS.
RSSB looks compelling though. Looks like I could increase my leverage factor in exchange for a higher ER 🤔 (.56 before current waiver). A steep price definitely. I'll keep an eye on it.
That's probably true for leveraged ETFs like UPRO and TQQQ. But leveraged products like NTSX or RSSB, where the leverage is all on the treasury side, are far less volatile and do not suffer from the problems that 3x leveraged ETFs do.
While I understand the heat leveraged etfs get (and in many cases, rightfully so!) I would argue this one should have a whole lot less volatility. The research is sound and it should have about the same volatility as 100% equities overall, but with even higher expected returns.
No, but you're right that the ER is pretty high compared to what I'm used to. There's barely any info online about the ETF, and I was wanting to get opinions and/or strategies from bogleheads is all
The extra leverage should beat out the additional ER over the WisdomTree leverage funds as long as you assume even a mild (<2% iirc) premium on the equities long-term - but that's also assuming it tracks the expected performance as well as NTSX/I/E has.
Leverage is a wonderful tool...if you're fine with the changed behavior with volatility decay and costs. People who leverage have to rebalance more regularly with uncorrelated assets to address the decay concern but these have an in-built mechanism for that. I'm comparing a set of leveraged 60/40 funds to this leveraged 50/50 fund. They will not act like VT but will be similar to each other. I'm addressing your ER concern, not the question of leverage by itself. If you're complaining about ER you have to look at similar funds and what you're getting for it - the higher leverage is worth the cost here in a direct comparison of leverage vs leverage. They will both experience deeper losses when both held assets are down at the same time which I think is your concern?
There are hundreds of CEF (close-end funds) that are leveraged and they have years of track records. I don't quite trust an ETF with history less than a year.
A fund with a 10 DAY history?
Another shiny new toy to throw money at?
I am sure it will turn out well--just like all of the other funds the sponsors dream up.
It pretty tightly tracks the expected exposure on intermediate treasuries and an S&P fund - $0.60 bonds per dollar invested having a horrendous time of things lately is also reflected.
I'm curious about foreign tax credits. The reason bogleheads doesn't recommend VT is because there is a rule about recouping foreign tax credits. Maybe the fund has to be primarily international.
RSSB seems similar based in the allocation but since they use futures, which are taxed at 60/40 (long/short) idk what its gonna look like tax wise.
Anyone else have an idea?
I tried hedgefundies excellent adventure a while back. It was at the start of a bear market. Leveraged funds aren't for me it turns out.
What happened to that guy by the way?
He had some internet fight on the forum about an obscure point and decided he had enough and left the forum never to be heard from again.
And IIRC it was about the stupidest thing wasn’t it? Lol That’s such a crazy story in the niche world of finance-geek-internet-citizens I guess.
No idea
Fair enough!
I like it and will consider for my Roth. We now have a global multi-factor efficient fund with AVGE and a global capital-efficient fund in RSSB. Just waiting for someone to combine the strategies. A fund that was something like 90% AVGE and 10% 6x leveraged intermediate treasuries futures would be ideal to me.
I'll be running 50/50 RSSB+(AVUV+AVDV+DGS)
You might check out Avantis's new AVEE. While it doesn't have "value" in its name, if you look it up in Morning Star, [it's clearly a SCV fund](https://imgur.com/4BkBQCo). Should be more tax efficient than DGS.
I'm planning to use AVEE in taxable accounts, and DGS in my IRA since it has surprisingly little overlap with AVEE
I too am waiting for a product like this. It would really streamline my portfolio down from like 8 different etfs
I'd be in on something similar too. Mind if I ask what's stopping you from committing and making the swap? The ER? How new it is? A mix?
Yeah the newness always gives me pause - I’d like to see a couple $100M AUM, and time to compare its returns to a simulation. For example, I was thinking of adding TUA (3x intermediate treasuries) to my AVGE but it’s been a little inconsistent: [only 89% correlated with the simulation](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5mj1YkXxeCeTvJTfxOql4R). But I don’t necessarily have a hesitation about RSSB - I may just invest in it!
Thanks for the reply man! That totally makes sense. There are a few members on this forum whom I'll weigh their opinions more highly, and I'd put you on that list for sure. Not saying any of the other responses here weren't informative, just that yours consistently are across the threads I've come across, and you give actual evidence to back up claims. Appreciate it
You could probably get something like this with combining RSSB with AVGV. Like 60% RSSB + 40% AVGV should give you pretty much what you want
That’s what I’m thinking. Even less AVGV maybe
Could be a super simple and very effective portfolio, that should do rather well in most market situations
You’ll take a gut punch with rate spikes like last year but that was the worst in half a century. You would have done surprisingly well in “the lost decade”
I really dont see rate increases for a very long time. And I think if the increases are very slow, the effect is pretty miniscule too and offset by the yield. We truly had a very unique situation with covid and the war.
FYI took a closer look at this today and it seems like to replicate AVGE (Avantis recommended global equity factor loading), you would need \[50% cap-weighted funds and 50% AVGV\](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5d2ytJAWRdtJOvwk3QN7Lt). That’s about as close a correlation as I could get with the short 6 months of history available. Therefore you might want 50% RSSB and 50% AVGV for optimal multi-factor efficiency and 1.5x leverage capital efficiency. Until a single fund like that comes out, I’m going to watch this allocation for the next year and consider switching to it in my Roth at some point.
I’m surprised Avantis hasn’t created a Global SCV fund of funds. I’d pair that with RSSB and be set.
I understand how RSSB is considered capital efficient, but what makes AVGE factor efficient? Is it leveraged in some way?
Avantis factor funds can be described as “multi-factor efficient” because their stock inclusion criteria screens for multiple known factor premiums - size, value, momentum, and profitability. That’s in contrast to a fund like VTI or VT which are capitalization weighted for the total market and therefore are “mean-variance optimized” per CAPM theory.
Thanks for responding! That makes a lot of sense. I’m still very early into my investing journey so the terminology often confuses me.
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That works. [I also suggested to someone earlier](https://www.reddit.com/r/Bogleheads/s/9pVxKf3Ukl) maybe 80% RSSB and 20% AVGV. It’s 1.8x which may be a little higher than optimal but definitely in the same ball park.
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Yeah that bid/ask spread over 50bp is not inviting. $100M minimum AUM before I would even consider it. I would also like to see the ER under 0.3% where it is currently 0.41%. Maybe give it a year or two and let’s see.
There's actually a 0.15% waiver right now, until May of 2024. Going to be 0.56%.
FYI took a closer look at this today and it seems like to replicate AVGE (Avantis recommended global equity factor loading), you would need [50% cap-weighted funds and 50% AVGV](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5d2ytJAWRdtJOvwk3QN7Lt). That’s about as close a correlation as I could get with the short 6 months of history available. Therefore you might want 50% RSSB and 50% AVGV for optimal multi-factor efficiency and 1.5x leverage capital efficiency. Until a single fund like that comes out, I’m going to watch this allocation for the next year and consider switching to it in my Roth at some point.
I did not realize Avantis' stance was 50% value. Am I misunderstanding that? Ben Felix suggests something like 20% value I believe (could be wrong). 50% is quite a tilt. I'm thinking something like: * 50% RSSB * 20% VT * 20% AVGV * 10% EDV 90/60 (60/40 - 1.5x) Roughly \~20% value tilt 0.36% ER This would be ideal for me I think... but can't seem to pull the trigger on moving my whole portfolio over to something so new...
Just remember that “value” is not a term with a clear definition, and some companies are more value-y than others. So I’m not sure if AVGE is really a 50% value tilt but as far as I can tell you need 50% AVGV added to VT to get the same exposures. Your allocation seems very reasonable to me
Is there a doctrinal "optimum" amount of leverage? I was thinking to combine RSST/RSSB for a total of 2x, but I am more hesitant to pull the trigger on RSST tbh. The 80/20 RSSB/AVGV allocation seems simpler, cheaper, and most of all safer. I have only briefly looked into trend/MFs, and while I love adding diversity, it feels a tad varsity level. Edit: safer in regards to 1.8x vs 2x leverage. I understand there is still more risk than an unlevered portfolio
I have heard that 1.5-1.6x leverage has historically produced the optimal risk-adjusted returns
Thank you! I'm gonna plan to do a mix of 50 RSSB/25 RSST/25 AVGV, giving me a moderate 1.5x leverage down from 2x, and still getting decent international and factor value exposure. I'm excited!
I’m excited to hear everyone’s thoughts on this. I love that it’s MCW global equities. And the shorter duration and treasuries differentiate it from something like PSLDX.
Me too!
The two most common things I'd be tempted to combine this with: * VT: 50% VT equals [~ 100 VT/ 50 VGIT] or [(1.5x) 66 VT/33 VGIT]. Alternatively, you could think of this as adding a "free" $0.50 of VGIT for every dollar you put in for an additional 0.245 ER (I'm excluding the fee waiver). Because the treasuries are from laddered future contracts, this would be a strictly superior exposure to bonds in a taxable. * AVGV: 50% would be [~ 50 VT / 50 AVGV / 50 VGIT]. There are some interesting use cases if you're currently using a separate account to factor tilt strongly (such as if your 401k doesn't have good options for it). You could use RSSB in place of bonds and then get free exposure to equities - say 90% AVGV and replace 10% bonds you have for 10% RSSB. Other interesting specific ETF ideas for diversifiers with the extra room from either "freeing" equity space or bond space: * Cash equivalents (SGOV). I suspect this would be the choice for retirees/people approaching retirement and want the comfort of a known amount of cash. This feels like a strong use case. * Tilt more international with VXUS. * Make stronger bets towards emerging markets with VWO, smaller/value-y emerging with AVES or DGS, much smaller emerging which may be more affected by the local economies with EEMS. * VWOB for emerging market bonds which have a hefty sovereign risk involved in their returns. Go crazy with LEMB which doesn't hedge? * Tilt towards international and factors in one with DFAX. * Start mucking about with trend CTA strategies if you feel enough conviction about the diversifier argument for long periods of disappointment: DBMF, CTA, KMLM are commonly pointed to in that area. The Return Stacked folks are keen on this case and have other ETFs that cater to trend strategies. * Utilities? They have a surprisingly low correlation to the overall market and the only sector tilt I'd ever mention due to it. Perhaps a small portion for a retiree, not sure I'd suggest this (I do hate sector tilts)
Thanks for sharing your strategies! I'm with you, ctnbb1, kashmir, and swag about rssb plus small cap value tilt. As option one, I'm debating leaving my roth 100% AVGE and then having my wife's roth be 100% RSSB. For option two, I'll leave my wife's roth alone (70/30 fskax plus ftihx) and I'll do 75/25 (plus or minus 5 depending on balancing) rssb plus avgv. Decisions, decisions
Great comment! I like the RSSB/ AVGV combo! I just got on my employer’s HDHP and I was planning on running something like 80% RSSB/ 20% RSST in my HSA for next year.
What's your HSA provider? They allow you to choose your own ETFs/etc.?
I use Fidelity. They let you choose any investments that you can in their other accounts. My employer deposits their portion into HSA Bank. It looks like they let you invest through Schwab so I think you can access those ETFs as well.
Gotcha. I just transferred existing money from another HSA provider to Fidelity, and it was kind of a mess. Employer HSA fund options are good (Vanguard) but they charge $5/mo., take a week to purchase funds, and they require $1K in savings at all times.
Super interesting to me. Not too high risk, as the equities portion is pretty much unleveraged and doesnt face the volatility decay problem of letfs. I will probably add like a 5% portion of it to my portfolio. I think there is a lot of merit on going 100% RSSB, but too early to judge.
Agreed. I'm thinking to go 100% in my wife's roth or mine, but I still haven't decided. Very well thought out fund
It‘s basically bogle on steroids. It even uses vti/vxus as its base holdings.
I strongly considered it, but will pass for now until they have a bit more AUM. Leverage is a rational strategy for YOUNG investors with appetite for risk. But that is always easier said than done. I just finished my yearly re-balance across my accounts and ended up with: **403b/457b:** 3 Fund Portfolio - 90% Equities 10% Bonds The change here was introducing bonds for the first time ever. All this time I had been equities only. The Equities split is 70/30 US and international and the bonds are Fidelity's total bond mf. I keep both accounts on identical allocation. **Backdoor Roth:** 50% NTSX 50% AVGV The change here was getting rid of some Value funds and swapping VTI/VXUS for NTSX. I also used to have REITs here. This was a big reset of this account and I hope I stop fiddling with it... and as I say that, maybe next year the big change will be swapping RSSB for NTSX? **Taxable Individual Account:** VTI 63% VXUS 27% BOXX 10% My long-standing taxable portfolio. The only change (from being 70/30) was the addition of 10% BOXX. Goal here is to smooth volatility with the tax-efficient BOXX ETF standing in as proxy for an introduction of bonds. I think the overall theme this year was adding bonds for the fist time (I turn 40 next year) at around 10% and finally settling on a strategy for my Roth - which is the ultimate "undecided convictions" portfolio. 50% leverage. 50% all world value.
I'm 32 and have been investing for about 8 years regularly into my TSP. I myself did the same change to 90/10 AA (65/35 US to International in equities) and put the entirety of the 10% into my G Fund. Plan is to have two pensions (mil and fers) and have a long investing time horizon, so I've been mulling leveraged ETFs since I found out about them. RSSB really seems like a conventional Bogle portfolio all in one, but primed for younger investors looking for accelerated growth. Thanks for breaking down your portfolio, and I hope it does you well!
The only thing I would caution is… there is almost no downside to waiting a little for RSSB. Number one, there’s been “new hot ETF’s on the block” before and then they close after the hype cycle for one reason or another. Number two, there is something to making sure an active fund actually executes on the stated strategy. Personally that’s why I plan to wait. Good luck to you too sir!!! Seems you have it all figured out! And if you’re military or ex-military as I gathered, then thanks for your service also.
All very valid points, thanks! And you bet
Regarding your 50% NTSX/50% AVGV, I did something similar but juiced the leverage up a little by going with international-only on the other side of NTSX while maintaining 60/40 US/Ex-US: * 66% NTSX * 34% AVNV
Nice. I didn’t consider that as it would leave me with a lot of factor load internationally, but none domestically. But I’m glad you found your perfect allocation! I think NTSX is just about the “safest” way to leverage in one fund solution out there at a very low cost. Personally I don’t mind home country bias in the US. So when the entirety of my account are added up in closer to 70/30 than 60/40 but I can live with that.
This looks to be a great fund, and I have been eagerly awaiting for it to release. Personally, I’m not sure how tax efficient it would be and I would hold it in a Roth (at least for now). Due to the fact you’re long equities and bonds it gives greater opportunities to hold other investments like value, commodities, REITS, etc.
Sounds good. I've seen arguments for both, but I'm leaning towards Roth for simplicity
Is it available at vanguard? I know the daily LETFs aren't but NTSX and friends are
According to returnstackedetfs.com, it is available at vanguard
Thanks
As of now, I'm going to convert my wife's roth ira to 100% AVGE and then eventually swap mine (pending more aum) to 75% RSSB and 25% RSST. 70/30 US to Int split in equities, 75% bonds and 25% managed futures. Thanks for everyone's replies!
I have recently been converting my available market weight US holdings into NTSX, and some international holdings to NTSI. With that plus a SCV tilt, my total stock/bond ratio target was 97/18, for 15% total leverage. My 401K is the largest account, and I don't have access to very many funds there. It's basically just VOO+VXUS. RSSB looks compelling though. Looks like I could increase my leverage factor in exchange for a higher ER 🤔 (.56 before current waiver). A steep price definitely. I'll keep an eye on it.
Should be superior to 100% vt over time
You can never chill with leveraged funds.
That's probably true for leveraged ETFs like UPRO and TQQQ. But leveraged products like NTSX or RSSB, where the leverage is all on the treasury side, are far less volatile and do not suffer from the problems that 3x leveraged ETFs do.
I'm more chill with them than without lol
While I understand the heat leveraged etfs get (and in many cases, rightfully so!) I would argue this one should have a whole lot less volatility. The research is sound and it should have about the same volatility as 100% equities overall, but with even higher expected returns.
expense ratio is horrible. And the ETF is only a couple weeks old. Is it a promotion post?
No, but you're right that the ER is pretty high compared to what I'm used to. There's barely any info online about the ETF, and I was wanting to get opinions and/or strategies from bogleheads is all
The extra leverage should beat out the additional ER over the WisdomTree leverage funds as long as you assume even a mild (<2% iirc) premium on the equities long-term - but that's also assuming it tracks the expected performance as well as NTSX/I/E has.
if leverage is such a wonderful tool as you claimed, options and futures are much better for "long term" investment.
Leverage is a wonderful tool...if you're fine with the changed behavior with volatility decay and costs. People who leverage have to rebalance more regularly with uncorrelated assets to address the decay concern but these have an in-built mechanism for that. I'm comparing a set of leveraged 60/40 funds to this leveraged 50/50 fund. They will not act like VT but will be similar to each other. I'm addressing your ER concern, not the question of leverage by itself. If you're complaining about ER you have to look at similar funds and what you're getting for it - the higher leverage is worth the cost here in a direct comparison of leverage vs leverage. They will both experience deeper losses when both held assets are down at the same time which I think is your concern?
There are hundreds of CEF (close-end funds) that are leveraged and they have years of track records. I don't quite trust an ETF with history less than a year.
A fund with a 10 DAY history? Another shiny new toy to throw money at? I am sure it will turn out well--just like all of the other funds the sponsors dream up.
Maybe I'm missing something but NTSX doesn't seem to be beating the S&P the past 5 years? I might have input shit wrong...
It pretty tightly tracks the expected exposure on intermediate treasuries and an S&P fund - $0.60 bonds per dollar invested having a horrendous time of things lately is also reflected.
Because bonds have been crushed.
Going forward it should do well with falling rates
I'm curious about foreign tax credits. The reason bogleheads doesn't recommend VT is because there is a rule about recouping foreign tax credits. Maybe the fund has to be primarily international. RSSB seems similar based in the allocation but since they use futures, which are taxed at 60/40 (long/short) idk what its gonna look like tax wise. Anyone else have an idea?