Calculated Risk 150 Overview
| CAGR | 23.6% |
|---|---|
| Maximum drawdown | -12.7% |
| MAR ratio | 1.85 |
| History | 23 years (281 months) |
Calculated Risk 150 is the entry tier of the Calculated Risk family: a portfolio of two DMS strategies, one of which can lever itself when conditions warrant with Smart Leverage. It holds Triad and Catalyst 200 at 50% each, and rebalances back to those weights each January.
Half the portfolio never levers at all. The other half levers only when Smart Leverage says conditions are right, and only to 2x. That combination is what the name describes and what the tier exists for: meaningful use of leverage, held to a level most investors can actually live with.
What the Name Means
The number is exact arithmetic, not a label.
| Component | Weight | Maximum notional | Contribution |
|---|---|---|---|
| Triad | 50% | 100% | 50% |
| Catalyst 200 | 50% | 200% | 100% |
| Total | 100% | 150% |
That 150% is the notional maximum leverage. Average notional has run around 111%, and leverage has been deployed in roughly a quarter of all months, so do not think it is always leveraged to 150%. Because weights drift between January resets, a strong run for Catalyst 200 can carry actual exposure somewhat above the ceiling until the next reset; the highest on record is 163%, in September 2020.
Catalyst 200 reaches 2x through QLD.
How the Leverage Works
The leverage here is conditional rather than constant, which is the whole point.
Smart Leverage does not run a permanently levered portfolio. It sits idle by default and deploys only after specific conditions are met, most importantly a drawdown trigger. Leverage arrives after a decline, when the expected forward return is better and the distance left to fall is smaller. It is not applied at highs.
Two consequences follow, and both matter more than the headline number.
The worst-case drawdown is not what the ceiling implies. Because the modules deploy after declines rather than before them, the levered sleeves were generally not on during their own worst episodes. Catalyst 200 has historically matched unleveraged Catalyst's maximum drawdown, which is not something a constantly levered position could do. Treat that as a historical fact about how the trigger behaved rather than a structural guarantee.
Leverage still cuts both ways. A conditional rule is not a safety net. Smart Leverage has a strong record, and a record is not a promise. Anyone using this tier should size it as though the leverage could hurt, because eventually it will.
Why These Two Blocks
Triad at half the portfolio
Triad is the stabilizer in every member of this family and the only block here that never levers. Holding it at 50% is what does the work of the name: it is the ballast that keeps maximum notional at 150% while the other half is free to lever to 2x.
The same reasoning puts unlevered Triad at 35% in Calculated Risk 185, while Calculated Risk 250 drops it entirely in favor of the leveraged Triad 135. Raising unlevered Triad raises the floor and lowers the ceiling, which is exactly what an entry tier should do.
Catalyst 200 at the other half
This leveraged version of Catalyst is a powerhouse growth driver. It is the 2x version rather than the 3x, which keeps the ceiling at 150% and keeps the leverage modest. Catalyst also reads a completely different input from Triad, a macro regime built from growth and inflation rather than relative momentum, so the two halves rarely go defensive at the same moment.
One leverage switch
With a single levered block, there is a single leverage decision. The portfolio reaches its 150% ceiling whenever Catalyst 200's Smart Leverage module is fully deployed, and sits at 100% the rest of the time. That makes the leverage easy to see and easy to reason about.
No passive sleeve
The crisis protection in these portfolios comes from the active blocks going defensive, not from a hedge sleeve. So this blend takes that protection directly from Triad and Catalyst, and does not pay for a basket to deliver it.
Rebalancing
Calculated Risk 150 resets to 50/50 in January, and only in January. Between resets the weights drift with each block's returns, so a strong year for Catalyst 200 leaves it above 50% until the following January.
Annual rebalancing at the portfolio level keeps trading low where it can be kept low. Each component is still rebalancing its own holdings monthly, and the leverage module is arming and deploying on its own schedule throughout the year.
The Mix Can Change
Calculated Risk 150 is a portfolio of DMS strategies, and the DMS lineup is not frozen. New strategies are added and existing ones are refined over time, and when a new or updated strategy would make for a better risk-adjusted portfolio, the strategies and weights used here may change. Changes take effect at the start of a new month, never partway through one.
When the mix changes, the history shown on this page is recalculated as if the current mix had been held throughout. The record describes today's portfolio, not the path an investor following it would actually have taken, which is one more reason to read it as a backtest rather than a track record.
Why the Record Starts in 2003
Catalyst's regime classification depends on market-implied inflation expectations, and that data series begins in 2003. Since Catalyst 200 is a component here, the portfolio's history begins there too.
Triad has a much longer record on its own page. Comparisons between this portfolio and strategies whose histories reach back to 1980 are comparing different eras as well as different designs, so the tables below hold every row to the same window.
Performance Highlights
Over the full available history, alongside its own components:
May 2003 through October 2026, net of trading friction:
| CAGR | Max Drawdown | MAR | |
|---|---|---|---|
| Calculated Risk 150 | +23.6% | -12.7% | 1.85 |
| Triad | +14.6% | -8.6% | 1.69 |
| Catalyst 200 | +32.0% | -17.9% | 1.79 |
| S&P 500 | +11.3% | -51.0% | 0.22 |
The third column is the Ulcer Performance Index: return above cash divided by how deep the portfolio went and how long it stayed there. Max Drawdown reports the worst single moment; UPI reports the experience of holding it. Higher is better.
Read the top row against the two below it. The blend scores higher on UPI than either of its components, including Catalyst 200, which compounds far faster on its own. Triad brings the shallow drawdowns and Catalyst 200 brings the growth, and pairing two engines that fail at different times produces something neither is individually. Quiet Compounding shows the same result without leverage.
Against the index, this tier earns roughly double the annual return with a worst decline around a quarter of the index's, which is what a levered portfolio of defensively-designed strategies is supposed to look like when the leverage is conditional.
The family ladder
The same window, showing where this tier sits among its siblings:
May 2003 through October 2026, net of trading friction:
| CAGR | Max Drawdown | MAR | |
|---|---|---|---|
| Quiet Compounding | +15.6% | -7.2% | 2.17 |
| Calculated Risk 150 | +23.6% | -12.7% | 1.85 |
| Calculated Risk 185 | +27.9% | -17.3% | 1.62 |
| Calculated Risk 250 | +33.3% | -23.6% | 1.41 |
| S&P 500 | +11.3% | -51.0% | 0.22 |
Return climbs steadily as you move up the ladder, drawdown climbs with it, and the risk-adjusted column barely moves: the three leveraged tiers land between 6.80 and 6.94, with no meaningful winner.
Moving up the ladder does not buy better risk-adjusted performance, it buys more return in exchange for more pain, at roughly a constant exchange rate. The right tier is the one whose worst decline you would actually hold through, not the one with the best number.
Two cautions apply here as everywhere. These records are backtested, and a levered portfolio assembled from components chosen after their histories were known deserves more skepticism than a single unlevered strategy does. And a single figure covering two decades says nothing about the order the returns arrived in, which is most of what an investor lives through, particularly with leverage involved.
Portfolio Characteristics
- Leverage with a ceiling. Maximum 150% notional at target weights, reached when Catalyst 200's leverage module is deployed. Average notional has run around 111%.
- Half the portfolio never levers. Triad at 50% is the structural brake on the whole design.
- No 3x sleeves. The one levered block reaches 2x and no further, through QLD.
- Conditional, not constant. Leverage deploys after drawdown conditions are met rather than being carried permanently.
- Two independent engines. Rotational momentum and macro regime positioning, each reading different inputs.
- Annual rebalancing at the top level. Weights reset each January and drift in between.
- Substantial underlying turnover. The portfolio trades rarely; its components do not.
- Best suited to tax-deferred accounts. Component-level turnover generates short-term gains. In a taxable account, plan accordingly.
- Shorter history than most strategies here. The record begins in 2003 because of Catalyst's data dependency.
- Fully mechanical. Every allocation and every leverage decision follows from published rules with no discretionary override.
Who It's For
Calculated Risk 150 is designed for investors who want:
- Higher returns than an unlevered portfolio, with leverage kept to a level they can sleep through.
- Leverage applied after declines rather than carried at all times.
- Diversification across strategy types rather than across asset classes alone.
- A single portfolio to follow rather than two.
- A clear ceiling on total exposure that is stated as arithmetic rather than described in adjectives.
It is a poor fit for investors who want no leverage at all, who would be unable to hold through a decline larger than the historical worst, or who are investing money they will need soon. Anyone in that position should look at Quiet Compounding, which uses the same portfolio-of-strategies approach with no leverage anywhere. Investors comfortable with more should compare the tiers at Calculated Risk 185 and Calculated Risk 250.
A general caution about this family: leverage magnifies whatever happens next, including the parts nobody modeled. Size the position accordingly.
Past performance, including backtested results, is not indicative of future results. Backtested performance is hypothetical, does not reflect actual trading, and benefits from hindsight in the selection of strategy rules and component weights. Portions of the history rely on reconstructed proxy data for funds that did not exist for the full period. Leveraged exchange-traded funds carry risks beyond those of their unleveraged counterparts. Investors should carefully consider their risk tolerance and consult with a financial advisor.
For the latest details, visit www.DualMomentumSystems.com