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 an exchange-traded fund (ETF) that uses leverage to balance its investments. It invests 90% in stocks and 60% in government bonds, using futures to achieve leverage. While NTSX usually performs well, it can experience large losses and underperform when inflation rates are high.

The WisdomTree U.S. Efficient Core Fund ETF uses a 60/40 mix of stocks and bonds, with a leverage factor of 1.5. NTSX invests in stocks for its equity portion and boosts its portfolio using Treasury futures. While NTSX performs well compared to other multi-asset ETFs, it falls a bit short of what might be expected given its leverage.

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.