June 2025 Economic And Investment Update

Market Update

May turned out to be a rewarding month for equity investors, with the S&P 500 rallying nearly 4.3%, driven by strong earnings, improving macroeconomic sentiment, and resilient consumer spending. The S&P 500 and the Nasdaq 100 (NDX) have both recovered and are positive year-to-date, reflecting investor confidence in technology and growth sectors as well as a broadening market rally.

Technology and large-cap growth stocks continued to lead the charge, while the broader market showed signs of participation deepening, a promising sign for diversified portfolios managed under strategic business wealth management.

Spotlight on Leveraged ETFs

In today’s dynamic investment landscape, many asset allocators are increasingly turning to leveraged exchange-traded funds (ETFs) to tactically enhance returns. These innovative vehicles aim to provide a multiple (typically 2× or 3×) of the daily performance of an underlying index or sector, offering a way to capture market upside in favorable conditions.

Leveraged ETFs can also improve a portfolio’s Sharpe ratio when used carefully.

The Sharpe ratio is a widely used metric that measures a portfolio’s return relative to its risk (defined as volatility). A higher Sharpe ratio indicates that the portfolio is delivering more return per unit of risk: a key goal for long-term investors seeking to optimize performance while managing volatility as part of their succession planning strategy.

By allocating a small portion of the portfolio to leveraged ETFs, we aim to enhance risk-adjusted returns—taking advantage of market rallies while keeping overall portfolio risk in check through disciplined position sizing and diversification.

Recognizing the May upswing, we have added a small layer of leveraged ETFs, like SPUU and FNGB, to select portfolios. This approach allows us to participate more fully in market rallies while continuing to ration risk and preserve the disciplined investment framework we uphold as a fiduciary financial planner.

SPUU and FNGB in Focus

• Direxion Daily S&P 500 Bull 2× Shares (SPUU): Seeks 2× the daily return of the S&P 500—well-suited for capitalizing on sustained strong trends like the rally in May.
• MicroSectors FANG+ 3× Leveraged ETN (FNGB): Seeks 3× the daily performance of the NYSE FANG+ Index, offering amplified exposure to a select group of high-growth tech and internet names.

The rally in May has reminded us that markets can turn quickly, highlighting the importance of diversified exposure and adaptive portfolio positioning. By integrating a modest allocation to leveraged ETFs like SPUU and FNGB, we aim to capture potential upside while staying disciplined in our risk management approach, which is crucial when preparing for a liquidity event.

Disclaimer

Portus Wealth Advisors, LLC (“Portus”) is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training and does not constitute endorsement by the SEC.

The information contained in this communication is for informational purposes only, is general in nature, and is not directed to any specific individual. It does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Reading this communication does not create an advisory relationship with Portus.

The views and opinions expressed herein are those of Portus as of the date of publication and are subject to change without notice. Portus makes no representation that any opinion or projection will be realized. Information has been obtained from sources believed to be reliable; however, Portus does not warrant its accuracy, completeness, or timeliness.

Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific strategy will be profitable or suitable for an investor’s individual circumstances. Investors should consult their own tax, legal, and financial professionals before making investment decisions.