Highly leveraged barbell portfolio mixing aggressive stocks exposure with long term treasury amplification
Report created on May 4, 2024Risk profile
7/7
Diversification profile
4/5
Positions
-
UP ProShares UltraPro S&P500
UPRO - US74347X8645 55.00% -
TM Direxion Daily 20+ Year Treasury Bull 3X Shares
TMF - US25460G1388 45.00%
The structure is an extreme two‑ETF barbell: around half in a 3x leveraged S&P 500 fund and just under half in a 3x leveraged long‑term Treasury fund. This means the portfolio is effectively using leverage on both growth and interest‑rate exposure while still keeping a simple, two‑line‑item layout. That simplicity can feel neat but hides very complex behavior under the surface, because both holdings can swing far more than traditional funds. For someone running this type of setup, clarity about goals, drawdown tolerance, and time horizon is crucial, because this is closer to a trading structure than a sleepy long‑term allocation.
Growth
Historically, $1,000 grew to about $5,053, with a strong 17.62% compound annual growth rate (CAGR). CAGR is the “average speed” of growth per year, smoothing out ups and downs. This clearly beat both the U.S. and global equity markets over the period, showing that leverage paid off in a long bull market. However, the max drawdown of roughly -65% is almost double the market’s worst fall. Max drawdown is the largest peak‑to‑trough loss you would have experienced. The key message: performance has been excellent, but the cost is gut‑wrenching volatility that only investors with strong nerves and long horizons can tolerate.
Asset classes
- Stocks 55%
- Bonds 46%
Asset‑class exposure splits roughly into 55% stocks and 46% bonds, which on the surface looks like a classic balanced mix. However, both sleeves are using 3x leverage, so the effective economic exposure is far higher than a normal 60/40‑style portfolio. The bond side focuses on long‑term Treasuries, which are very sensitive to interest‑rate shifts; paired with leveraged equities, this can create sharp moves in both directions. In strong risk‑on and falling‑rate environments, that combination can be powerful. In rising‑rate shocks or equity crashes, losses can compound quickly. The structure suits investors who deliberately want amplified equity‑rate interaction rather than gentle diversification.
Sectors
- Technology 19%
- Financials 7%
- Telecommunications 6%
- Consumer Discretionary 6%
- Health Care 5%
- Industrials 5%
- Consumer Staples 3%
- Energy 2%
- Utilities 1%
- Real Estate 1%
- Basic Materials 1%
This breakdown covers the equity portion of your portfolio only.
The sector profile is tilted toward technology and other growth‑oriented industries, with technology standing out clearly ahead of the rest. Smaller allocations spread across financials, telecom, consumer areas, health care, and industrials help maintain a broadly diversified equity slice, which aligns reasonably well with major broad‑market benchmarks. This alignment is a positive: it means sector risk within equities is not wildly skewed toward niche themes. Still, a tech‑heavy lean can mean extra sensitivity to interest‑rate expectations and sentiment around innovation‑driven businesses. In environments where growth and tech fall out of favor, the leveraged structure can magnify the sector’s swings dramatically.
Regions
- North America 55%
This breakdown covers the equity portion of your portfolio only.
Geographic exposure is almost entirely to North America, which effectively means a strong reliance on the U.S. economic and policy environment. That’s consistent with many broad equity benchmarks but shows little diversification into other regions’ cycles or currencies. In periods when the U.S. outperforms, this home bias is beneficial and has historically helped returns. If non‑U.S. markets lead or the dollar weakens, the portfolio doesn’t benefit much from those shifts. For someone comfortable with U.S. dominance and policy risk, this alignment is fine; those wanting smoother global diversification might normally add other regions, though doing so with leverage would further complicate risk.
Market capitalization
- Mega-cap 16%
- Large-cap 12%
- Mid-cap 6%
This breakdown covers the equity portion of your portfolio only. Some holdings may not have full classification data available. Percentages may not add up to 100%.
Market‑cap exposure leans heavily toward mega‑ and large‑cap companies, with a smaller slice in mid‑caps and essentially negligible small‑cap presence. This large‑cap bias is very similar to major U.S. indices and helps keep single‑company blow‑ups less impactful, since big companies tend to be more diversified businesses. It also means the portfolio is tied closely to the fortunes of well‑established market leaders, especially in growth and technology. The lack of small‑cap exposure avoids some extra volatility but also forgoes potential small‑company outperformance in certain cycles. Within a leveraged framework, the stability of mega‑caps is actually a helpful offset to the structural leverage risk.
True holdings
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TL iShares Trust - iShares 20+ Year Treasury Bond ETF 29.97%
Part of fund(s):- Direxion Daily 20+ Year Treasury Bull 3X Shares
-
NV NVIDIA Corporation 2.65%
Part of fund(s):- ProShares UltraPro S&P500
-
AA Apple Inc 2.30%
Part of fund(s):- ProShares UltraPro S&P500
-
MS Microsoft Corporation 1.77%
Part of fund(s):- ProShares UltraPro S&P500
-
AM Amazon.com Inc 1.28%
Part of fund(s):- ProShares UltraPro S&P500
-
GO Alphabet Inc Class A 1.09%
Part of fund(s):- ProShares UltraPro S&P500
-
AV Broadcom Inc 0.95%
Part of fund(s):- ProShares UltraPro S&P500
-
GO Alphabet Inc Class C 0.87%
Part of fund(s):- ProShares UltraPro S&P500
-
ME Meta Platforms Inc. 0.82%
Part of fund(s):- ProShares UltraPro S&P500
-
TS Tesla Inc 0.67%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- ProShares UltraPro S&P500
- Top 10 total 42.36%
This breakdown covers the equity portion of your portfolio only.
Looking through to underlying holdings, a big exposure appears in the long‑duration Treasury ETF, effectively magnifying interest‑rate moves. On the equity side, familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, Alphabet, Broadcom, Meta, and Tesla appear repeatedly via the S&P exposure. This creates hidden concentration in a handful of large growth companies even though they are held only through funds. Because only top‑10 ETF positions are captured, true overlap is likely higher. The takeaway is that, despite having just two funds, the portfolio still leans heavily on a small group of big growth names plus long‑term government bonds.
Factors
Factor exposure shows a mild tilt away from value and a stronger tilt toward quality, with other factors close to neutral. Factors are characteristics like value, momentum, or quality that research links to long‑term return patterns. Here, the quality tilt suggests an emphasis on profitable, financially robust companies, which can help during stress compared with more speculative names. The lower value exposure implies less focus on “cheap” stocks and more on growth‑oriented leaders. With momentum, size, yield, and low volatility near market‑like levels, factor risk is fairly balanced beyond that quality skew. In a leveraged setting, that quality bias is a constructive feature, adding some resilience.
Risk contribution
-
ProShares UltraPro S&P500
Weight: 55.00% 72.1% -
Direxion Daily 20+ Year Treasury Bull 3X Shares
Weight: 45.00% 27.9%
Risk contribution shows that the leveraged S&P fund, at 55% weight, contributes over 72% of the portfolio’s total volatility. Risk contribution measures how much each holding adds to overall ups and downs, which can differ from its simple weight. The equity ETF’s risk/weight ratio above 1 signals that it is more volatile than its share suggests, dominating risk. The leveraged Treasury fund, though still risky, contributes relatively less than its weight would imply. If the goal is to dial down equity‑driven swings, shifting exposure away from the stock side and toward the bond side, or toward non‑leveraged instruments, would be the main lever to change behavior.
Risk vs. return
This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.
Click on the colored dots to explore allocations.
On the risk‑return chart, the current portfolio sits right on or very near the efficient frontier, meaning that for its chosen risk level, the mix of the two ETFs is already using them efficiently. The Sharpe ratio of 0.45 is lower than the potential 0.67 optimal point but that optimal allocation also runs much higher volatility. The efficient frontier shows the best return available for each risk level using only current holdings. Since this setup is already close to that curve, there’s no obvious efficiency gain from simple reweighting unless the desired risk level changes. The main decision is not optimization, but how much extreme volatility feels acceptable.
Dividends
- Direxion Daily 20+ Year Treasury Bull 3X Shares 3.50%
- ProShares UltraPro S&P500 0.90%
- Weighted yield (per year) 2.07%
The overall yield of about 2.07% comes mostly from the leveraged Treasury position, with a modest contribution from the equity ETF. Dividend yield is the annual cash distribution as a percentage of price, offering a partial buffer to returns independent of price moves. In this case, leverage means distributions can be more variable, and any income needs to be weighed against the high volatility of the underlying holdings. For an investor focused primarily on growth and willing to ride big swings, the yield is a nice add‑on but not the main attraction. It’s better viewed as supplemental cash flow, not a stability anchor.
Ongoing product costs
- Direxion Daily 20+ Year Treasury Bull 3X Shares 1.04%
- ProShares UltraPro S&P500 0.92%
- Weighted costs total (per year) 0.97%
Total ongoing costs are around 0.97% per year, reflecting the use of specialized leveraged ETFs. The expense ratio (TER) is the annual fee charged by the fund, taken out of returns before you see them. For plain index funds, this would be high, but for daily‑rebalanced 3x products, it’s in line with typical pricing. These costs are the “entry ticket” for getting leveraged exposure without using margin directly. Still, over many years, nearly 1% annually compounds meaningfully, especially if performance slows. Using leverage efficiently means being very sure the higher expected returns more than compensate for both fees and the structural drag of daily rebalancing.
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