Today\u2019s post is our second visit to Capital Efficient ETFs<\/a>.<\/p>\n Here\u2019s what we learned last time:<\/p>\n We\u2019re working through a series of six articles on CEEs by Justin from Risk Parity Chronicles.<\/p>\n I mentioned in my first post that ReSolve and NewFound have joined forces to launch some \u201cReturn Stacked\u201d ETFs<\/a>.<\/p>\n On the bond<\/a> side, it will have a target duration of 2 to 8 years, though may purchase bonds up to 20 years in term. On the managed futures side, it will be a long & short fund covering 27 separate markets in four asset<\/a> classes: equities, bonds, currencies, and commodities.<\/span><\/p>\n<\/blockquote>\n The second fund (in the works when Justin was writing) is RSSB, which is 100% global equities plus 100% bonds (Justin thought it would be 90\/60, but their plans changed).<\/p>\n Back to article number four \u2013 a third fund mentioned by Justin is the first leveraged managed futures fund \u2013 Tuttle Capital 2X DBMF ETF<\/a> (MFUT).<\/p>\n On the managed futures side, there aren\u2019t even that many regular ETFs<\/a> available. Of the few, iMGP DBi Managed Futures Strategy ETF<\/a> (DBMF) is my choice. And you have KMLM, WTMF, FMF, and CTA, but that is not very many.<\/span><\/p>\n<\/blockquote>\n Considering their usefulness, CTA funds are surprisingly rare (there are none here in the UK) but if I were a US investor, six funds is getting there.<\/p>\n Justin notes that the usual ETF<\/a> screener sites (he uses Barchart and VettFI in the States \u2013 I use JustETF here in the UK) don\u2019t pick up the CEEs.<\/p>\n The list has a lot of US mutual funds on it, and since I can\u2019t access those from the UK, I have provided an abridged list of just ETFs<\/a> below:<\/p>\n There are also a couple of levered BitCoin funds that Justin has left out:<\/p>\n Simplify has two capital efficient funds featuring an allocation to BitCoin (SPBC and MAXI), but that was a bit out of my frame of reference.<\/span><\/p>\n<\/blockquote>\n Article number five in Justin\u2019s series was dedicated to a third Return Stacked ETF<\/a> (which was actually the second to launch, in September 2023).<\/p>\n It\u2019s expensive (1.04% pa in charges) but not if you see that as the fee for an extra 100% of leverage<\/a>.<\/p>\n The final post (so far) in Justin\u2019s series sums everything up, and documents his enthusiasm for CEEs:<\/p>\n I\u2019m totally enamored with the promise of Capital Efficient ETFs<\/a>. There is hope that they will bring to the average DIY investor some new possibilities typically reserved for a few: the use of smart, reasonable leverage<\/a> to achieve higher expected returns while still maintaining highly diversified portfolios. <\/span><\/p>\n I\u2019ve spoken of this as the second path of Risk Parity [higher returns for the same level of volatility].<\/span><\/p>\n<\/blockquote>\n It also covers how to account for these \u201cstrange\u201d beasts (are they 90+10, 90+60 or 100+100?) in your portfolios.\u00a0He defines some terms:<\/p>\n Here are some fund examples:<\/p>\n Here\u2019s how Justin recommends tracking the funds:<\/p>\n If you want to do things this way, Justin has a Google Sheets template that you can use.<\/p>\n I account for leverage<\/a> in a slightly different way:<\/p>\n Note that I have multiple sources of leverage<\/a> (margin from spread bets and US brokerage accounts as well as levered ETFs<\/a>).<\/p>\n I\u2019m not quite as stoked as Justin, but I\u2019m pretty excited by the growth of CEEs, and I hope they succeed.<\/p>\n There are US brokers who provide access to the US funds, but only in taxable accounts.<\/p>\n If the government really wanted to encourage private investors, they would allow non-UCITS ETFs<\/a> in SIPPs and ISAs.<\/p>\n Until next time.<\/p>\nThe story so far<\/span><\/h6>\n
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Return Stacked Funds<\/span><\/h6>\n
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Managed futures funds<\/span><\/h6>\n
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Fund List<\/span><\/h6>\n
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CEE portfolio tracker<\/span><\/h6>\n
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![\"Examples\"](\"https:\/\/the7circles.uk\/wp-content\/uploads\/2023\/12\/Examples-300x134.jpg\")
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Conclusions<\/span><\/h6>\n
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