NTSX: Leveraged 60/40 Strategy At Low Cost
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The WisdomTree U.S. Efficient Core Fund ETF (NTSX) employs a leveraged 60/40 strategy using Treasury futures for leverage and tax efficiency. However, it has underperformed its theoretical leverage factor due to fees, rebalancing, and roll yield, showing similar volatility but lower risk-adjusted performance compared to the S&P 500.
November 22, 2024 | 11:45 am
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WisdomTree U.S. Efficient Core Fund ETF (NTSX) uses a leveraged 60/40 strategy but has underperformed its theoretical leverage factor due to fees, rebalancing, and roll yield. It shows similar volatility but lower risk-adjusted performance compared to the S&P 500.
The ETF's underperformance relative to its theoretical leverage factor, due to fees and rebalancing, suggests a negative short-term impact on its price. The comparison to the S&P 500 highlights its lower risk-adjusted performance, which may deter investors.
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