Ray Dalio was pounding the table on the debasement in Davos this week. Good timing for the new Bitwise Proficio Currency Debasement ETF (BPRO) if he's correct. BPRO started trading today so I am not sure if the holdings will fully reflect the strategy. The confusing holdings are SPTS, BIL and SHY which are all T-bills and they comprise 35% of the fund. The rest is a lot of Bitcoin. precious metals and mining companies.
You don't need to backtest it to know it would have done pretty well last year thanks to the miners and precious metals and if Bitcoin ever goes up again, then BPRO would probably do well in that environment. There are plenty of ways to get these sorts of exposures so I don't know that it would do any better or any worse than the others, maybe the name including the word debasement is simply catchy or maybe the managers, it's an active fund, can nimble their way around the space a little better.
Don't looks now but the Cambria Trinity Fund (TRTY) has been ripping higher.
It doesn't do well with fast changes and there can be serious dispersion in performance between different funds due differences in risk weighting, various types of signals used and other things. If you remember my posts from when it was struggling, I talked constantly about sizing it correctly and then holding on. If all you owned was TRTY, 35% in trend would be too much for me. I don't want a lousy year in managed futures trend to have a big enough impact on the portfolio that I sweat it. When markets puke down, managed futures is just one thing of several that should go up and usually they do even if not always.
Simplify filed for a few funds that look interesting including the Simplify Tax Aware Total Portfolio Approach ETF (TPA). Total Portfolio Approach is something we've been exploring lately. Most recently, we worked with the idea that it is a blend of growth and stability versus equities and fixed income common to the traditional 60/40 portfolio. Not all equity strategies offer growth and not all fixed income offers stability.
If you click through and read the strategy, the TPA ETF appears to including an element of risk weighting which was not covered in the Morningstar article that gave us the growth/stability construct. I am both intrigued by risk weighting and not very fond of it at the same time.
It is intriguing in terms of thinking about how risk/volatility/return potential is distributed through a portfolio. I'm not fond of the idea of loading up on traditional fixed income to the point of leveraging up which is common to risk parity 1.0. Maybe risk parity 2.0 starts with TPA.
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