Corey Hoffstein discusses leveraging ETFs for investing, tax efficiency, diversified portfolios, trend-following strategies, capital efficiency with treasury futures, RSSB product combining stocks, bonds, and managed futures, high yield bond complexity, transitioning to diversified investments, and international perspectives on Bitcoin and digital currencies.
Return stacking with ETFs optimizes investment outcomes through tax efficiency and diversification.
Diversification in portfolios can be enhanced by overlaying additional investment strategies, adding uncorrelated diversifiers.
Leveraging a mix of assets like stocks, bonds, and managed futures can potentially outperform equities in the long run.
Deep dives
Introduction to Return Stacked ETF Products
The concept of return stacking and its application in ETF products is explored. The goal is to enhance tax efficiency and diversification while leveraging ETFs to optimize investment outcomes.
Fundamental Problem Addressed
The core problem in the industry is the lack of diversification in most portfolios, which primarily consist of stocks and bonds. Despite the consensus that diversification is beneficial, portfolios remain limited to traditional asset classes.
Implementation of Return Stacking
A strategy called return stacking is introduced to structurally enhance portfolio diversification by overlaying additional investment strategies on top of core stock and bond holdings. This approach offers a unique method to add diversifiers without extensive modification to existing portfolios.
Challenges and Considerations
An important consideration in return stacking is the potential correlation risk among different asset classes. While managing liquidity and leveraging efficiently are key components, the primary concern lies in ensuring that the overlay investments remain uncorrelated to prevent amplified drawdowns.
Using Leverage for Portfolio Diversification
The podcast discusses leveraging a balanced mix of stocks, bonds, and managed futures in a portfolio to enhance diversification benefits and potentially outperform equities in the long run. Despite facing tax consequences, the speaker believes that the advantages of diversification and return streams outweigh the tax inefficiencies. By strategically using leverage, the speaker aims to unlock the benefits of diversification and maintain a risk profile comparable to being 100% invested in equities.
NFTs, Digital Economy, and Metaverse Trends
The episode delves into the phenomenon of NFTs, the digital economy, and the evolving concept of the metaverse. The conversation covers the implications of owning digital assets like Board Ape NFTs and the potential intersection of online and offline worlds. With a focus on digital currencies and the metaverse's growing relevance, there is a discussion on how virtual economies could impact real-world economic decisions, highlighting global instances where digital currencies provide stability and value relative to local currencies.
Corey Hoffstein, Founder and CEO of Returned Stacked Portfolio Solutions, stops by to discuss how he uses ETFs to leverage his investing assets. Corey and Bill discuss a concept that is not novel to institutional investors, but may benefit individuals today because of ETF innovations. Bill wanted to discuss how Corey came up with his idea, how he executes his idea, and what risks his strategy might have.
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