Wall Street introduces ETFs that combine 90% stock and 60% bond exposure into the same dollar, offering a new approach to the traditional 60/40 portfolio.
These 'capital-efficient' ETFs, exemplified by the WisdomTree US Efficient Core Fund (NTSX), allocate approximately 90% of assets to US stocks and use Treasury futures to add another 60% bond exposure. This strategy aims to provide higher market exposure from the same capital pool, addressing the challenges faced by traditional 60/40 portfolios. Additionally, autocallable ETFs, which emerged in mid-2025 and now hold around $4 billion, are rapidly growing, aiming to pay high income as long as the market does not fall significantly. However, these strategies involve higher risk, and investors could face substantial losses in deep market sell-offs.
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