NTSX ETF

The WisdomTree U.S. Efficient Core Fund ETF uses a 60/40 investment strategy and incorporates Treasury futures to enhance leverage and tax efficiency. However, NTSX has not met the expected 1.5 leverage factor because of costs, rebalancing, and roll yield. When compared to the S&P 500, the Fund has similar levels of volatility but offers lower risk-adjusted returns.

NTSX is a leveraged balanced ETF. It has exposure to 90% equities, 60% treasuries. Leverage is gained through futures. NTSX tends to outperform, but sees significant losses and underperformance during periods of higher inflation.

WisdomTree U.S. Efficient Core Fund ETF implements a 60/40 equity-bond allocation with a 1.5 leverage factor. NTSX holds stocks for the equity part and leverages its portfolio thanks to Treasury futures. NTSX's performance looks great compared to other multi-asset ETFs, but it slightly underperforms expectations based on the leverage factor.

Equities and fixed income have been moving together due to inflation concerns, raising uncertainty about potential Fed rate cuts in 2024. The WisdomTree U.S. Efficient Core Fund ETF provides advantages for index investors with Treasury securities balancing out stock market fluctuations, although this is not the case currently. While NTSX has historically delivered solid risk-adjusted returns and tax benefits, stubborn inflation is currently undermining the ETF's diversification advantages.

By Bradley Krom, U.S. Head of Research The potential for stubborn inflation, a higher-for-longer policy from the Federal Reserve and structural $1 trillion deficits have all contributed to an abnormal shape in the U.S. Treasury curve. In this piece we look to other periods of curve inversion and conclude that inverted yield curves are generally not an impediment to equity returns.

WisdomTree U.S. Efficient Core Fund ETF is a leveraged balanced fund that focuses on equities and treasuries. Investing in both equities and treasuries reduces portfolio risk and volatility while boosting risk-adjusted returns. NTSX has generally strong returns with below-average risk, although it may underperform during periods of significant inflation.