Low Initiative LETF V2 (Dual SMA + TIP)
View this strategy's rules and backtest. Backtest max drawdown: -27.5%.
Strategy & methodology
Three-state daily tactical allocation driven by two SMA-with-buffer signals on SPY and VIPSX (Vanguard TIPS fund, used as the inflation/rates macro signal).
- Strategy type:
- Tactical asset allocation
- Rebalance frequency:
- Daily
- Original publication:
- Not recorded. All results are backtest simulations.
- Data through:
- Backtest data through 2026-10-08.
Simulated history
- Full history, since 2002
- 14.2% a year, worst fall -27.5% (Mar 18, 2020)
- Since UPRO launched (Jun 25, 2009)
- 17.4% a year, worst fall -27.5% (Mar 18, 2020)
Still partly simulated until May 2019: DBMF is reconstructed before its own launch.
Stand-in funds and until when (5)
- DBMF: KMLM before May 8, 2019
- UPRO: simulated 3x SPY before Jun 25, 2009
- UGL: simulated 2x GLD before Dec 3, 2008
- TLT: VUSTX before Jul 26, 2002
- IEF: VFITX before Jul 26, 2002
Before these dates the backtest uses a stand-in, not the fund itself, so the results over those stretches show how the rules would have behaved, not what the fund returned.
Research data and disclosures
View this strategy's rules and backtest. Backtest max drawdown: -27.5%. This is a tactical asset allocation strategy. BestFolio supplies the public rule or approach and backtest context; current signals, allocations, and paid interactive data remain restricted to Pro access. Users review the published signal and place any resulting trades in their own brokerage. Displayed returns remain hypothetical and do not represent a customer's brokerage record. The facts above show how current the data is.
- BestFolio supplies
- The daily signal email and this strategy page; current signals and email alerts require Pro access.
- Customer action
- Review the published signal and place any required trades in your own brokerage. BestFolio does not execute orders.
- Costs and exclusions
- Backtests are net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled. No tax, no slippage beyond the stated cost. Methodology limitations
Published result: Engine drift-until-flip-v1, data version c745be7b, published 2026-10-05
Is Low Initiative LETF V2 (Dual SMA + TIP) still working in 2026?
Low Initiative LETF V2 (Dual SMA + TIP) returned 23.28% over the trailing 12 months and 161.03% over 36 months through 2026-10-07, compared with a full-backtest annualized return of 14.27%. Its full-backtest maximum drawdown was -27.53%. The full sample contains 6269 daily NAV observations from 2002-01-21. These are model results, not investor account returns or a promise. As of 2026-10-07 it is -4.69% below its high-water mark of 2026-08-27, 41 days ago, and its longest run below a previous high was 2.2 years. Recent returns do not establish that the strategy will keep working.
| Period | Return | CAGR | Max drawdown | Observations | Dates |
|---|---|---|---|---|---|
| Trailing 12 months | 23.28% | Not annualized | -14.46% | 252 | 2025-10-07 to 2026-10-07 |
| Trailing 36 months | 161.03% | Not annualized | -21.10% | 753 | 2023-10-06 to 2026-10-07 |
| Full backtest | 2601.74% | 14.27% | -27.53% | 6269 | 2002-01-21 to 2026-10-07 |
Last verified
Common questions about these results
Are these live investor returns?
No. These are the latest model NAV results from the published backtest. A recent date alone does not make a result an independently observed live record. Investor costs, taxes and execution can differ.
Why can a strategy lag for a year?
A tactical model can hold defensive assets during a rally or change positions during reversals. A short window can differ substantially from its full history. Compare cumulative returns over matching dates and inspect drawdowns as well.
How long has it spent below a previous high?
Its last high-water mark was 2026-08-27, 41 days before 2026-10-07, and it is -4.69% below that level now. The longest run below a previous high in the full backtest was 2.2 years. Recovering from a drawdown can take years, and a strong trailing return does not mean a past high has been regained.
Where can I check the signals behind these results?
The Signals tab on this page lists each dated model decision for the selected variant; for Pro strategies they are visible to Pro members. The methodology page explains the backtest assumptions.
Low Initiative LETF V2 (Dual SMA + TIP) at a glance
Low Initiative LETF V2 (Dual SMA + TIP) is a tactical asset allocation (TAA) strategy by u/Low-Initiative-1327 (r/LETFs), rebalanced daily. Backtested 2002-01-21 to 2026-10-08 (24.7 years): 14.2% CAGR, 0.82 Sharpe, -27.5% max drawdown, 19.8% volatility.
- Type
- Tactical (TAA)
- Author
- u/Low-Initiative-1327 (r/LETFs)
- Rebalancing
- Daily
- Risk
- Aggressive
- Period
- 2002-01-21 to 2026-10-08
- CAGR
- 14.2%
- Sharpe
- 0.82
- Max Drawdown
- -27.5%
- Volatility
- 19.8%
Low Initiative LETF V2 (Dual SMA + TIP) — Tactical Asset Allocation Strategy
Three-state daily tactical allocation driven by two SMA-with-buffer signals on SPY and VIPSX (Vanguard TIPS fund, used as the inflation/rates macro signal). When SPY is firmly above its 200-day SMA (+4%), holds a leveraged Risk-On bucket: 50% UPRO, 25% UGL, 25% TLT. When SPY is firmly below (-4%) OR VIPSX drops below its own 200-day SMA (-1%), shifts to a defensive Risk-Off bucket: 50% IEF, 25% GLD, 25% DBMF. Otherwise holds 100% SPY. The dual signal lets the strategy step aside in inflationary regimes the SPY 200-SMA alone misses; the 2022 rate shock is the year where the TIP signal earns its keep. BestFolio uses UGL (real 2x gold ETF) in Risk-On instead of a synthetic 3x gold (no real US ETF exists for 3x gold) to keep the strategy fully replicable for US retail.
Low Initiative LETF V2 (Dual SMA + TIP): frequently asked questions
- What is Low Initiative LETF V2 (Dual SMA + TIP)?
- Three-state daily tactical allocation driven by two SMA-with-buffer signals on SPY and VIPSX (Vanguard TIPS fund, used as the inflation/rates macro signal). When SPY is firmly above its 200-day SMA (+4%), holds a leveraged Risk-On bucket: 50% UPRO, 25% UGL, 25% TLT. When SPY is firmly below (-4%) OR VIPSX drops below its own 200-day SMA (-1%), shifts to a defensive Risk-Off bucket: 50% IEF, 25% GLD, 25% DBMF. Otherwise holds 100% SPY. The dual signal lets the strategy step aside in inflationary regimes the SPY 200-SMA alone misses; the 2022 rate shock is the year where the TIP signal earns its keep. BestFolio uses UGL (real 2x gold ETF) in Risk-On instead of a synthetic 3x gold (no real US ETF exists for 3x gold) to keep the strategy fully replicable for US retail.
- Who created the Low Initiative LETF V2 (Dual SMA + TIP) strategy?
- Low Initiative LETF V2 (Dual SMA + TIP) was developed by u/Low-Initiative-1327 (r/LETFs).
- What is the historical return and maximum drawdown of Low Initiative LETF V2 (Dual SMA + TIP)?
- Backtested from 2002-01-21 to 2026-10-08, Low Initiative LETF V2 (Dual SMA + TIP) returned 14.2% CAGR with a -27.5% maximum drawdown and a Sharpe ratio of 0.82. Past performance does not guarantee future results.
- How often is Low Initiative LETF V2 (Dual SMA + TIP) rebalanced?
- Low Initiative LETF V2 (Dual SMA + TIP) is rebalanced daily. BestFolio publishes the updated allocation signal each period.
- Is Low Initiative LETF V2 (Dual SMA + TIP) a tactical asset allocation strategy?
- Yes. Low Initiative LETF V2 (Dual SMA + TIP) is a tactical asset allocation (TAA) strategy: it adjusts its holdings based on market signals each period rather than holding a fixed allocation.
Backtest Performance (2002-01-21 to 2026-10-08)
| Metric | Low Initiative LETF V2 (Dual SMA + TIP) |
|---|---|
| CAGR | 14.2% |
| Max Drawdown | -27.5% |
| Sharpe | 0.82 |
| Sortino | 1.41 |
| Volatility | 19.8% |
| Calmar | 0.52 |
| Total Return | 2567.8% |
| Backtest Period | 24.7 years |
Every rebalance fills at the signal-day close, net of modeled transaction costs. Followers trade at the next open; the delayed-close line in the Rebalance Frequency Sensitivity card shows the effect of trading one session later. Execution assumption
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- daily
- Risk Level
- aggressive
- Variants
- 1
- Author
- u/Low-Initiative-1327 (r/LETFs)
Further reading
New to this approach? Read what tactical asset allocation is and how it works.
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