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Strategies

LETF.io explains rules for leveraged ETFs; each strategy comes in several versions, meaning the same rule on a different index or with a different setting.

Strategy

SMA trend following

Stay invested with leverage, but sit out long crashes where possible.

Building blocksStocksCash

The rule compares an index with its moving average, the SMA line, every day. If the index closes above the line, you are invested. If it closes below, you step out and wait. The goal: not fully riding out long downturns, where leveraged ETFs fall especially hard. The cost: false signals when the index hovers close to the line.

Origin: Michael A. Gayed, Charles Bilello, 2016

Popular implementations

MSCI WorldSMA 255MSCI USASMA 200MSCI ACWISMA 200NASDAQ 100SMA 220S&P 500SMA 200
Go to strategy SMA trend following

Strategy

HFEA

Leverage stocks and long bonds together; the bonds are meant to cushion stock losses.

Building blocksStocksLong-term government bonds

The amount sits in two building blocks: an equity block and a long government bond block. Once a quarter the version rebalances to its target weight, 55 to 45 in the standard version. The goal: use both blocks' swings against each other, instead of holding only one side. Between the dates nothing happens, even when both sides fall at the same time.

Origin: HEDGEFUNDIE (Bogleheads forum), 2019

Popular implementations

S&P 500 and 20+ years50/50ZahlGrafS&P 500 and 20+ years80/20ZahlGrafS&P 500 and 25+ years50/50ZahlGraf
Go to strategy HFEA

A description of rules, not investment advice. The order of the versions follows the number of trackers, not an outcome. Leveraged ETFs can lose a large part of their value in a short time.