Executive summary: The author argues that return stacked ETFs are a promising, lower-cost way for altruists to obtain leveraged exposure to multiple asset classes simultaneously, presenting evidence that these funds have so far been more cost-effective than conventional leveraged ETFs while noting remaining uncertainties and limitations.
Key points:
Return stacking allows a fund to hold multiple asset classes at once with leverage (e.g. 100% stocks and 100% bonds), distinguishing return stacked ETFs from traditional single-index leveraged ETFs.
The author identifies four main families of return stacked funds and describes how they combine equities, bonds, and alternative strategies such as managed futures, futures yield, or gold, typically at 1.5–2:1 leverage.
Based on benchmark replication, the author finds that RSSB and NTSX had negative excess costs (–0.55% and –0.17% per 100% leverage respectively), meaning they outperformed leveraged benchmarks after accounting for borrowing costs.
The author suggests lower expense ratios, less frequent rebalancing, and the use of Treasury futures rather than swaps as likely reasons return stacked ETFs appear cheaper than conventional leveraged ETFs.
A 2026 update reports that RSSB and NTSX continued to show negative excess costs through 2025, reinforcing the claim that their low costs were not a one-year anomaly.
The author notes limitations, including limited fund variety, no options with more than 100% equities, year-to-year cost variability, and unresolved questions about the long-run value of leveraged bonds.
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Executive summary: The author argues that return stacked ETFs are a promising, lower-cost way for altruists to obtain leveraged exposure to multiple asset classes simultaneously, presenting evidence that these funds have so far been more cost-effective than conventional leveraged ETFs while noting remaining uncertainties and limitations.
Key points:
Return stacking allows a fund to hold multiple asset classes at once with leverage (e.g. 100% stocks and 100% bonds), distinguishing return stacked ETFs from traditional single-index leveraged ETFs.
The author identifies four main families of return stacked funds and describes how they combine equities, bonds, and alternative strategies such as managed futures, futures yield, or gold, typically at 1.5–2:1 leverage.
Based on benchmark replication, the author finds that RSSB and NTSX had negative excess costs (–0.55% and –0.17% per 100% leverage respectively), meaning they outperformed leveraged benchmarks after accounting for borrowing costs.
The author suggests lower expense ratios, less frequent rebalancing, and the use of Treasury futures rather than swaps as likely reasons return stacked ETFs appear cheaper than conventional leveraged ETFs.
A 2026 update reports that RSSB and NTSX continued to show negative excess costs through 2025, reinforcing the claim that their low costs were not a one-year anomaly.
The author notes limitations, including limited fund variety, no options with more than 100% equities, year-to-year cost variability, and unresolved questions about the long-run value of leveraged bonds.
This comment was auto-generated by the EA Forum Team. Feel free to point out issues with this summary by replying to the comment, and contact us if you have feedback.
This summary is accurate.