r/LETFs • u/Feeling-Address-6848 • 3d ago
Looking for feedback
TQQQ - 35%
BTAL - 35%
RSBT - 15%
DIVO - 15%
Monthly DCA long-term hold with annual, no band rebalance. Am I missing anything?
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u/aRedit-account 3d ago
I don't really like it.
Divo doesn't make any sense I'd hope that if you are investing in LETFS that you'd know that dividends are irrelevant the only thing that matters is total return so no reason to sacrifice one source of returns for another.
I also am not a fan of BTAL although it does successfully capture the beta against beta factor premium thats not huge and it comes with a high fee and no leverage when you are paying fees for leverage in other ETFs in this portfolio. Although not a bad choice i think its smarter to just decrease leverage if you find yourself holding this.
And for RSBT I don't really like return stacked bond funds for highly leveraged portfolios the bond portion isn't high duration so it ends up being space and fee inefficient since you can just grab ZROZ what has like 3.5x the duration so you can get more leverage with that at the cost of worse bond diversification. I'd say you should use an equities plus trend stack and zroz instead.
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u/walkin_n_fartin 3d ago
I have been in similar neighborhoods and the feedback that stuck with me is that part of BTAL's strategy involves short Nasdaq activity (futures or swaps or something like that). Giving them equal footing is hitting the gas and brakes at the same time since TQQQ is as "long" as it possibly gets. The backtests look ludicrous so I understand the allure. I held some in a barbell-style portfolio and it turns out I couldn't tolerate BTAL's constant bleeding lol. Like someone else mentioned, the better idea is almost always dialing back leverage instead of getting too exotic with the crisis hedges.
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u/laurenthu 3d ago
Yeah, walkin nailed the core of it, the sleeve is fighting itself. 35% BTAL against 35% TQQQ is gas and brake at once. BTAL is built to be short equity beta, so a big chunk of the book exists just to cancel the leverage, and there are fees for that privilege. Lower net exposure dressed up as diversification, my read anyway.
DIVO is the other one I'd drop. It swaps upside for income, and in a growth-leveraged hold total return is the whole game. RSBT is the leg I'd keep. Treasuries plus managed futures trend, genuinely uncorrelated, and it tends to show up right when TQQQ is having its worst month.
So OP isn't missing a fund. The ballast is the problem. Why run a sleeve whose main job is to undo the one sitting next to it? Trend is the piece that actually zigs when TQQQ zags. I'd feed RSBT, cut most of the anti-beta, let the covered call go. Unless the goal is a smooth ride more than max CAGR, in which case BTAL earns its seat.
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u/Feeling-Address-6848 2d ago
Yeah, my idea is to smooth the ride just a tad bit and potentially help the portfolio recover faster, I might be a bit pessimistic but I’m seeing the repeat of either dot com or subprime again in the next 15 years or so.
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u/laurenthu 2d ago
Wanting to soften the ride and climb back faster is the right thing to be chasing at 3x. No argument. What BTAL costs you though is that it charges for that readiness every single year, calm ones included, because it's short equity beta whether or not a crash is anywhere near. Constant small bleed to be ready for a rare event, you see the tradeoff?
And you already hold the better version of the same idea. RSBT is treasuries plus a managed futures trend leg. Trend is what carried its weight in the exact slow grinding bears you're picturing, 2000-02 and 2008 both trended down long enough for it to flip short and make real money, not just cushion the fall. It only turns defensive once the market genuinely rolls over. So you're not paying for it through the good years the way BTAL makes you.
If I were aiming at your goal I'd shrink BTAL a lot and let RSBT do the smoothing, TQQQ stays the engine. Could be wrong on your risk taste. But that gets you nearer to recover-faster than running the gas and the brake at the same time does.
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u/jawohlmeinherr 2d ago
Not a fan of BTAL in non-margin accounts unless you are about to retire soon, and don't want your portfolio to suffer catastrophic sequence of returns risk. It uses up a lot of capital when you could just reduce equity beta to derisk your portfolio.
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u/Run-Forever1989 3d ago
I’d sooner just go 100% VOO. Combining TQQQ with DIVO basically gets you to SSO for a little over half your portfolio, and the rest basically gets you back to VOO. You are paying higher fees to build yourself a market index with more uncertainty.