First Leveraged ETF Portfolios (3/16)

ETF Portfolio Management is First Robo-Advisor Platform
to Offer Leveraged ETF Portfolios

Firm’s 10 Investable Benchmark Portfolios Now Include 1.5x & 3x Asset Allocations

THOUSAND OAKS, CA; March 14, 2016– ETF Portfolio Management (ETF PM) today announced that it has launched six new investable benchmark portfolios. These dynamic portfolios are designed to help investors enhance their performance using leveraged asset class ETFs. The firm’s hybrid robo-advisor platform can be seen at InvestableBenchmarks.com, and now offers ten strategic indexing solutions.

“Many high net worth investors employ material leverage on their real estate investments, yet refrain from using any leverage on their liquid, multi-asset class portfolios,” said David Kreinces, ETF PM’s founder and portfolio manager. “Investors will be very surprised to see the incredible performance history from the disciplined use of leverage on portfolios with efficient asset allocation.”

Growth Portfolios

Over the past decade, these growth portfolios have delivered impressive results, using leading ETFs from Vanguard, iShares, PowerShares, ProShares, and Direxion:

  • Growth – a portfolio of three ETFs with 42% Nasdaq 100 (QQQ), 8% US REIT Index (VNQ), and 50% LT Treas. Bonds (TLT).
  •  Growth 1.5x – a portfolio of four ETFs with 32% Nasdaq 100 2x (QLD), 6% Dow Jones U.S. REIT Index 2x (URE), 38% LT Treas. Bonds 2x (UBT), and 24% ST Treas. Bonds (SHY).
  • Growth 3x – a portfolio of three ETFs with 42% Nasdaq 100 3x (TQQQ), 8% US REIT Index 3x (DRN), and 50% Long-Term Treasury Bonds 3x (TMF).

Over the past decade, we estimate that these efficient growth portfolios delivered net annualized returns of 10% to 26%, or total returns of 171% to 1,017%, with losses of just -2% to -8% in the stock market crash of 2008. However, amid the Internet crash in 2001, these leveraged growth portfolios lost -21% to -41%.

Over the trailing 16.2 years, we conservatively estimate that these growth portfolios produced net annualized returns of 7% to 15%, or total returns of 217% to 878%. “Overall, these passive growth portfolios performed extremely well, aside from a large cumulative drawdown in Growth 3x from 2000 to 2002,” remarked Kreinces. “Given the volatility associated with leveraged ETFs, these growth portfolios may require additional risk control efforts at times.”

ETF PM charges an ultra-low-cost advisory fee of 0.25% for the Growth Portfolios, and their expense ratios range from 0.45% to 0.98% per annum.

Income Portfolios

Over the past decade, these income portfolios have been extraordinary investment solutions as well, using leading ETFs from Vanguard, iShares, ProShares, and Direxion:

  • Income two ETFs with 30% Global Equities (VT) and 70% LT Treas. Bonds (TLT).
  • Income 1.5x – three ETFs with 23% S&P 500 (SSO), 52% LT Treas. Bonds 2x (UBT), and 25% ST Treas. Bonds (SHY).
  • Income 3x – two ETFs with 30% S&P 500 3x (UPRO) and 70% LT Treas. Bonds 3x (TMF).

Over the past decade, we estimate that these dynamic income portfolios delivered net annualized returns of 7% to 17%, or total returns of 102% to 389%, with gains of 11% to 37% in the crash of 2008. However, these leveraged income portfolios also lost -5% to -30% in 2009.

Over the trailing 16.2 years, we conservatively estimate that these income portfolios produced net annualized returns of 8% to 16%, or total returns of 229% to 957%. “Overall, the income portfolios performed extremely well, aside from large Income 3x drawdowns in 2001 and 2009,” remarked Kreinces. “Given the volatility associated with leveraged ETFs, even leveraged income portfolios require additional risk control efforts at times.”

 InvestableBenchmarks.com

ETF PM’s hybrid robo-advisor platform, InvestableBenchmarks.com, now includes 10 different asset allocations for the three primary investor risk profiles: Income, Income & Growth, and Growth. These efficient core ETF portfolios are an important starting point for all investors.

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ETF Portfolio Management, LLC
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Newbury Park, CA 91320
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Fax: (805) 480-1111
Email: info@etfpm.com

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