The Tax Efficiency of Wisdom Tree

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PIMCO thinks they can add value in picking bonds, right? They think they can pick individual bonds, add some alpha. So to them, they're saying the passive part we want to give you is in the equities. We want to be active in the bonds. Therefore every dollar you give us, we have to spend that dollar buying bonds and we're going to give you S&P 500 futures exposure on top. Let's pause there for a second and talk about the tax efficiency of that because it's absolutely horrendous. This is a horrible way to get equity exposure.

Rebecca Hotsko chats with Corey Hoffstein, and together they discuss the concept of return stacking, its mechanics, leverage determination, fund selection, and a whole lot more!

Corey Hoffstein is the co-founder and Chief Investment Officer at Newfound Research, which is a quantitative investment and research firm managing strategies that implement Return Stacking concepts.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro.

06:08 - The different types of funds that are available to investors to implement return stacking.

06:19 - What return stacking is and how this strategy works?

10:36 - The different ways this strategy can be implemented and the portfolio solutions it provides.

22:31 - How to decide how much leverage to take, and how much return stacking strategies should make up of the total portfolio allocation?

40:03 - The factors that contributed to the poor performance of certain return stacking ETFs since 2021.

42:55 - The common mistakes investors make when implementing this strategy.

46:01- What factors impact the effectiveness of this strategy?

52:49 - How to mitigate risk when this strategy breaks down?

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out: Newfound Research.
Related Episode: Listen to MI260: Top Stock Picks 2023 w/ Logan Kane, or watch the video.

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