What is a high sharpe ratio leveraged etf portfolio

A high Sharpe ratio leveraged ETF portfolio would typically include ETFs with high beta values, as these are more sensitive to market movements and can offer higher returns, assuming the investor is willing to accept higher risk. However, backtesting the performance of the top 10 ETFs with high beta and high Sharpe ratio did not yield any results, indicating that such portfolios may not exist or are not easily identified using this approach.

Instead, focusing on ETFs with high beta values and high Sharpe ratios, as suggested by the literature, might be more promising. The optimal portfolio would likely have a balance of stocks and bonds, with a mix that maximizes the Sharpe ratio, which is a measure of risk-adjusted return. This suggests that a portfolio with a mix of equities and fixed income assets, such as the one described by the "alpha-week" website, could be a good starting point.

1. High Beta Values: ETFs with beta values greater than 1 are more volatile than the broader market and can offer higher returns in times of market upswings. These ETFs are suitable for investors who are comfortable with higher risk for potentially greater rewards.
2. High Sharpe Ratios: The Sharpe ratio is a measure of risk-adjusted return, indicating the excess return per unit of risk. ETFs with high Sharpe ratios are efficient in terms of risk management, providing higher returns for a given level of risk.
3. Optimal Mix: The "alpha-week" website suggests that the optimal mix for stocks, bonds, and other assets (like mutual funds) is around 50/50/50, which yields high returns with acceptable risk. This approach involves leveraging the ETFs to increase the CAGR while maintaining diversification benefits, ensuring that the portfolio's risk is well-managed.

In conclusion, a high Sharpe ratio leveraged ETF portfolio would be one that balances risk and reward by incorporating ETFs with high beta values and high Sharpe ratios, while maintaining an optimal mix of asset classes to maximize returns while minimizing risk.