NTSD delivers leveraged exposure to global developed market equities (90% U.S., 10% international) while using Treasury futures to achieve roughly 90% stock/60% bond exposure in a single fund. It's essentially a portable leverage strategy that amplifies a traditional 60/40 portfolio without using margin.
How It Works
The fund holds physical stocks tracking U.S. and international developed market indexes, then layers on Treasury futures contracts to create synthetic bond exposure equal to 60% of NAV. This '90/60' structure means $100 invested behaves like $150 allocated to a traditional 60/40 portfolio. The futures roll monthly, creating ongoing transaction costs but avoiding the cash drag of holding actual bonds.
Key Features
- 1.5x leverage on a balanced portfolio without margin calls or borrowing costs
- Monthly futures rolls provide duration exposure without holding physical bonds
- Single-ticker access to leveraged global equity and Treasury exposure
Risks
- Leverage amplifies losses — a 20% equity drop plus rising rates could mean 30%+ drawdowns
- Futures roll costs and tracking error can erode returns by 1-2% annually in volatile markets
- Rising rates hurt both the equity valuations and Treasury futures simultaneously
Who Should Own This
Best for aggressive investors who want balanced portfolio exposure but need higher expected returns to meet goals — think 40-year-olds playing catch-up on retirement savings. Also useful as a core holding for those comfortable with leverage who want to free up capital for alternatives. Not suitable for anyone who can't stomach seeing their 'balanced' fund drop 25% in a bad quarter.