WisdomTree’s new Efficient Core ETFs have landed in Europe, and they’re not your typical index trackers. The NTSG (global) and NTSZ (Eurozone) promise something that sounds mathematically impossible: 90% equity exposure plus 60% bond exposure in a single product. That’s 150% total exposure, achieved through leverage, with the goal of delivering better risk-adjusted returns than a traditional 60/40 portfolio. But in French investing circles, where the PEA (Plan d’Épargne en Actions, a French equity savings plan) is king and cost-consciousness runs deep, these products are sparking heated debate. Are they a genuine breakthrough or just another complex ETF that looks better on paper than in practice?
The 90/60 Structure: How It Actually Works
The mechanics behind NTSG and NTSZ are clever but require careful unpacking. Both ETFs target 90% exposure to equities and 60% exposure to government bond futures, rebalanced quarterly. The bond component uses futures contracts on sovereign debt from the US, Germany, UK, and Japan (for NTSG) or eurozone governments (for NTSZ). A 10% cash component serves as collateral for the futures, creating the leverage effect.
This structure means you’re not just buying stocks and bonds, you’re getting a leveraged position where the bond overlay is designed to reduce volatility while maintaining equity-like returns. WisdomTree calls this “volatility harvesting”, a concept that theoretically allows investors to capture the equity risk premium with less severe drawdowns. The TER (Total Expense Ratio, the annual fee) is 0.25% for NTSG and 0.20% for NTSZ, which seems reasonable until you factor in the hidden costs of futures rolling and market maker spreads.
French Tax Advantages: The PEA Question
For French investors, the NTSZ variant holds particular appeal: it’s PEA eligible. This means you can hold it in France’s tax-advantaged equity savings plan, shielding your gains from capital gains tax if you hold for at least five years. The NTSG version, being USD-denominated and global, is only available in a CTO (Compte Titres Ordinaire, a standard securities account), making it less attractive from a tax perspective.
This distinction matters enormously in France, where the PEA is the default long-term investment vehicle. Many investors report that the lack of PEA eligibility for NTSG is a dealbreaker, while others see NTSZ as a way to get diversified Eurozone exposure with a bond buffer within their tax wrapper. The fact that NTSZ launched in September 2025 with PEA eligibility from day one suggests WisdomTree understands the French market’s specific requirements.
Simulated Performance: What the Backtests Show
Since both ETFs lack real-world track records beyond a few months, investors are turning to simulated backtests to gauge potential performance. French DIY investors have been sharing testfol.io simulations that compare a 90/60 strategy against traditional MSCI World and 60/40 portfolios.
One simulation using US proxies shows that a 60/40 portfolio since 1970 delivered returns equivalent to 100% equities but with significantly lower volatility. Adding leverage to create a 90/60 structure theoretically boosts returns while keeping risk below pure equity exposure. However, these simulations come with caveats: they assume perfect execution, ignore the TER drag, and use US bond data that may not perfectly match the ETF’s actual holdings.
The most revealing insight from community analysis is that starting point matters enormously. A backtest beginning in 1977, when bond yields were rising, produces far less impressive results than one starting in the 1980s bull market for bonds. This highlights a critical risk: the strategy’s success depends heavily on the bond component providing negative correlation to equities, which failed spectacularly in 2022 when both asset classes fell together.
The Execution Risks Nobody Talks About
Beyond the theoretical benefits, French investors are flagging practical concerns. The NTSG fund had just $49 million in assets under management as of January 2026, while NTSZ held €3.2 million. This low AUM (Assets Under Management) creates liquidity questions. As one investor noted, you can’t buy €2 million of these ETFs “at market” without creating a wide spread. The market maker mechanism helps, but execution is reportedly better at 4 PM when spreads tighten.
The ESG (Environmental, Social, and Governance) filtering is another hidden drag. WisdomTree applies ESG screens to meet European regulations, which excludes companies involved in tobacco, controversial weapons, thermal coal, and other sectors. This reduces the equity universe and creates tracking error versus pure market-cap indices. During WisdomTree’s AMA (Ask Me Anything session), their team acknowledged that as AUM grows, they can expand the number of holdings, but for now, the equity basket is less diversified than a plain MSCI World tracker.
Correlation Risk: The 2022 Problem
The most sobering analysis comes from examining how this strategy would have performed during inflationary crises. In 2022, when central banks aggressively raised rates, both stocks and bonds fell in tandem. The theoretical negative correlation that underpins the 90/60 strategy disappeared precisely when it was needed most.
French investors discussing this point note that the bond overlay wouldn’t have provided its usual cushion, and the leveraged structure would have amplified losses. Some suggest adding trend-following strategies as a third component, though accessible ETFs for this purpose are scarce in France. The KMLM ETF, mentioned in discussions, isn’t available to French retail investors, leaving them without an easy solution.
Cost Reality Check
While the TER seems competitive, the true cost is higher. Futures contracts incur rolling costs, and the quarterly rebalancing creates turnover. One backtester added a modest 0.20% annual drag to account for this, which noticeably reduced the strategy’s edge. For French investors already paying custody fees and potential transaction costs, these hidden expenses matter.
Moreover, the tax treatment of the futures component within a PEA is complex. While the equity portion enjoys tax-free growth, the derivatives overlay may be treated differently, potentially creating tax complications that aren’t immediately apparent.
Who Should Actually Consider These?
These ETFs are not for beginners. They suit investors who:
– Understand leverage mechanics and are comfortable with derivatives
– Have a long-term horizon (5+ years) to ride out volatility
– Value the PEA tax advantage for the Eurozone version
– Want a single-ticker solution for a leveraged 60/40 approach
– Already maxed out simpler options and are seeking portfolio fine-tuning
For most French investors, a plain equity ETF in a PEA plus a separate bond fund remains more transparent and easier to understand. The complexity premium only makes sense if you fully grasp the risks.
The Verdict: Innovation With Caveats
WisdomTree’s 90/60 ETFs represent genuine innovation in product design, addressing real investor needs for better risk-adjusted returns. The concept of volatility harvesting is sound in theory, and the PEA eligibility of NTSZ shows WisdomTree’s commitment to the French market.
However, the lack of track record, low liquidity, ESG tracking error, and correlation risks make these products premature for most portfolios. The strategy’s success depends on market conditions that may not persist. French investors would be wise to wait for larger AUM, longer performance history, and clearer tax guidance before committing significant capital.
For now, these ETFs belong on your watchlist, not in your core holdings. The idea is promising, but the execution and market environment need more time to prove themselves.
