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 2026-07-09 (24.4 years): 13.8% CAGR, 0.84 Sharpe, -26.5% max drawdown, 18.3% volatility.
- Type
- Tactical (TAA)
- Author
- u/Low-Initiative-1327 (r/LETFs)
- Rebalancing
- Daily
- Risk
- Aggressive
- Period
- 2002-01-21 to 2026-07-09
- CAGR
- 13.8%
- Sharpe
- 0.84
- Max Drawdown
- -26.5%
- Volatility
- 18.3%
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 2026-07-09, Low Initiative LETF V2 (Dual SMA + TIP) returned 13.8% CAGR with a -26.5% maximum drawdown and a Sharpe ratio of 0.84. 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 2026-07-09)
| Metric | Low Initiative LETF V2 (Dual SMA + TIP) |
|---|---|
| Compound Annual Growth Rate (CAGR) | 13.8% |
| Maximum Drawdown | -26.5% |
| Sharpe Ratio | 0.84 |
| Sortino Ratio | 1.44 |
| Annualized Volatility | 18.3% |
| Calmar Ratio | 0.52 |
| Total Return | 2243.8% |
| Backtest Period | 24.4 years |
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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