Another AIMer, Joe, has been backtesting some leveraged sector and index funds. Here's his post on a leveraged Homebuilder's ETF:
Monday, March 03, 2025 6:53:25 PM
Post# of 47642 Go
Here are full backtest results for NAIL (Direxion Daily Homebuilders & Supplies Bull 3x Shares) ETF.
Test period: 9.5 years
$50,000 invested on inception date of 8/19/15
Ending date: 2/28/25
AIM total return was 1,165% and Buy/Hold total return was 282%
AIM APR was 30.5% annually over the period
Ending Portfolio Value: $632,477
Ending Cash Value: $348,588
At highest value on 10/1/24 the portfolio value was $893,202 and cash value was $469,278 with overall return of 1,686%. Share price at this point was $170. At the end of the test period reported above share price had dropped to $70 and is on a downtrend with AIM buying shares.
These results obtained using standard 10% SAFE and 10% Minimum Transaction Size. Since this is a Deep Diver ETF, I increased Buy SAFE in 10% increments following each purchase, and reset it to 10% on the first sell. However, when Portfolio Cash exceeded 60%, the standard 10% Buy SAFE was used until it dropped below 50%, then I started to use the 10% incremental increases. The model ran out of cash only once during the test period, and Black Swan trading generated nice profits as the last purchase that wiped out cash was a rather large one.
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