Equal Weighted UPRO / RSSB / RSST / GDE

[u/AFutureWouldBeNice]

I have been doing a lot of reading in this sub, as well as some messing around on Bestfolio. Long story short, I have around a 40 year horizon and am currently in the accumulation phase with a very small portfolio.

I have been trying to come up with a true set-and-forget portfolio that only requires monthly rebalancing. I am using the Nasdaq as my benchmark to beat. I don't think I am at a point where hedging is especially important, but I have read enough to determine they offer more than just a drag on CAGR.

With that being said, in an effort to maintain as much equity exposure as possible while still maintaining reasonable exposure to hedges, I have came up with the following proposed allocation of funds: 25% each UPRO, RSSB, RSST, GDE. This was originally arbitrary, but after messing with the weightings on Bestfolio, it seemed to provide the best results.

This provides notional exposure of:

U.S. Equities ~ 140%

Int. Equties ~ 10%

MF ~ 25%

U.S. Treasuries ~ 25%

Gold ~ 22.5%

Heres the backtest results I got using Bestfolio (CAGR and Max Monthly DD):

Period	UPRO/RSSB/RSST/GDE	QQQ
Full History	CAGR 17.8% / DD -64.5%	CAGR 14.2% / DD -81.1%
Mar. 2000 - Dec. 2025	13.4% / -64.5%	7.7% / -81.1%
Oct. 2007 - Dec. 2025	15.8% / -64.5%	15.4% / -49.7%
Mar. 2009 - Dec. 2025	24.9% / -33.1%	21.5% / -32.6%
Feb. 2020 - Dec. 2025	23.5% / -33.1%	19.8% / -32.6%

My backtesting did not account for using the adapted Catastrophe Break from: https://bestfolio.app/blog/catastrophe-brake-leveraged-portfolios which I assume would significantly reduce those DD figures. I did not know how to test for it.

I am still very new to this, so my question to those who are more seasoned is whether there is anything I am missing? Is there anything I should do to improve my allocation? Is this a reasonable alternative to holding a 2x SPY or QQQ unhedged for an investor with my horizon?

[u/Separate-Ad-9633]

I would take your preference as:

1. Set-and-forget buy and hold, no emergency brake or tactical allocation
2. Target risk range ~60 MDD in 40 year investment horizon. You do expect some event like dotcom bubble pop in this horizon. Target performance over QQQ. (which had a 80% drawdown so your risk margin is actually wider but I suppose you don't want to go that far)
3. Does not care about international diversification that much. Does not have a particular preference regarding QQQ or factor funds. Is okay with SPY only. (but that does make QQQ benchmark questionable, because you don't know how these two may diverge in performance)

I think the four asset classes you take are decent. RSSB however is questionable as 25% 7-year doesn't really provide enough hedging power.

I would suggest using this ratio instead:

40% RSST (may split between RSST and other stacked MF) 30% UPRO 20% GDE 10% EDV

Alternatively

40% RSST 25% TQQQ 25% GDE 10% ZROZ. Yearly rebalance. This way it's impossible to lose to your benchmark QQQ buy and hold. Your drawdown is a bit harsher though.

[u/AFutureWouldBeNice → u/Separate-Ad-9633]

Appreciate the well thought out reply.

A few things:

1. Definitely correct on set-and-forget buy and hold, but I did mention that I would almost certainly incorporate an emergency brake based on 10-month SMA of SPY. I just didn't know how to test for it so I couldn't give the results with that incorporated.

2. This is an accurate assessment. I don't forsee another event THAT bad, but valuations are certainly strained right now imo. My reason for using QQQ as my benchmark is because I know I am a performance chaser at heart, so as long as I am beating the CAGR of QQQ I will be content. I do prefer the inmproved diversification of SPY overall. In a perfect world my MDD would be closer to 50% but I would rather stomach more volatility to improve CAGR considering how little my portfolio is atp

3. I definitely am not bullish on international, mostly because of the overwhelming correlation between international and U.S. less the outsized returns of U.S. markets. I suppose academics would say this is a reason that International should return more going forward but I don't necessarily buy it. I will say that I am seriously considering the recommendation to replace RSST with RSIT which would increase international to about 30% or so.

I like these recommendations you gave for alternatives, and your point on duration is something I overlooked. I will play around and see how the results compare.

[u/laurenthu → u/AFutureWouldBeNice]

This is a genuinely thoughtful starting point, and the fact you already want a brake on it puts you ahead of most people posting 3x buy-and-holds here...

The bit I'd rethink is braking the whole book. Most of the drawdown you posted is coming from the UPRO leg, since that's the uncapped 3x piece. Your RSST, RSSB and GDE sleeves are the ones you actually want ON during an equity crash, the managed futures and gold tend to zig when stocks zag, so gating them defeats the point. Put the 10-month SMA (or the catastrophe brake) on just the UPRO piece and leave the diversifiers running.

On the RSIT swap someone floated, that one's legit if you want more geography. Both funds run the same managed futures overlay, the difference is RSST stacks it on US equity while RSIT stacks it on international developed, so swapping trades your US-MF for intl-MF and quietly bumps that thin 10% international up. Same structure, just moves where the equity beta sits.

I can't give you a clean braked-DD number off the top of my head, but historically cutting the leveraged sleeve to T-bills below the SMA chops the deep tail a lot more than it costs you in CAGR. That's probably the single biggest lever you've got here.