Introduction
We are excited to introduce SEAF Ultra, a new enhancement to our proven SEAF model designed to empower investors to capture sector-specific opportunities using a disciplined approach to leverage.
SEAF Ultra dynamically employs 2x leveraged ETFs during high-momentum scenarios, selectively amplifying potential returns while maintaining Asbury’s hallmark focus on risk management. By layering additional quantitative tools over SEAF’s existing framework, SEAF Ultra pinpoints moments when market conditions justify transitioning from standard sector ETFs to their leveraged counterparts, ensuring that leverage is applied only when warranted.
In a constantly evolving market, SEAF Ultra offers an advanced approach to staying ahead. By combining SEAF’s sector-selection capabilities with intelligent leverage, SEAF Ultra provides a compelling opportunity to achieve greater returns through a thoughtful, data-driven approach to leveraging sector opportunities. We invite you to explore this exciting innovation and see how it can help you reach your investment goals.
The SEAF Model
What Are Leveraged ETFs?
Leveraged ETFs are sophisticated financial instruments engineered to magnify daily returns, offering double or even triple the performance of a specific index or sector. They achieve this using derivatives such as futures contracts to amplify exposure.
With SEAF Ultra, our model dynamically switches from a standard 1x SPDR sector ETF to its 2x ProShares counterpart when specific quantitative metrics signal an extraordinary opportunity.
Refer to the table below to see the ETF’s we are leveraging for this model.
| 1x | 2x |
| Consumer Discretionary Select Sector SPDR Fund (XLY) | ProShares Ultra Consumer Discretionary (UCC) |
| Communication Services Select Sector SPDR Fund (XLC) | ProShares Ultra Communication Services (LTL) |
| Technology Select Sector SPDR Fund (XLK) | ProShares Ultra Technology (ROM) |
| Consumer Staples Select Sector SPDR Fund (XLP) | ProShares Ultra Consumer Staples (UGE) |
| Financial Select Sector SPDR Fund (XLF) | ProShares Ultra Financials (UYG) |
| Materials Select Sector SPDR Fund (XLB) | ProShares Ultra Materials (UYM) |
| Real Estate Select Sector SPDR Fund (XLRE) | ProShares Ultra Real Estate (URE) |
| Industrial Select Sector SPDR Fund (XLI) | ProShares Ultra Industrials (UXI) |
| Utilities Select Sector SPDR Fund (XLU) | ProShares Ultra Utilities (UPW) |
| Energy Select Sector SPDR Fund (XLE) | ProShares Ultra Energy (DIG) |
| Health Care Select Sector SPDR Fund (XLV) | ProShares Ultra Health Care (RXL) |
How SEAF Ultra Works
SEAF Ultra is powered by the same algorithmic engine behind SEAF, which identifies the velocity of money flows across the 11 sector SPDRs. By layering in additional quantitative tools, SEAF Ultra pinpoints “special situations” where leveraging a 2x ETF can amplify returns.
While SEAF identifies where to invest, SEAF Ultra’s overlay determines when the market has aligned conditions—like having the “wind at your back”—to justify using leveraged ETFs. SEAF Ultra transitions from 1x to 2x ETFs when these three conditions are met:
- Positive Relative Performance: The sector shows strength compared to SPY.
- Favorable 1x vs. 2x Comparison: The leveraged ETF demonstrates superior performance relative to its 1x counterpart.
- Positive Asset Flows: Evidence of increasing capital moving into the 1x ETF indicates investor confidence.
Why Choose SEAF Ultra?
Asbury Research users familiar with SEAF know its consistent ability to outperform the S&P 500 in various market conditions, all while maintaining S&P 500-like risk levels. SEAF Ultra builds on this foundation by adding the upside potential of 2x leveraged ETFs.
Back-tested results highlight SEAF Ultra’s impressive performance:
- 131% outperformance vs. SPY Since Inception (June 2018)
SEAF Ultra vs. S&P 500 (SPY): Q4 2018 through Q4 2024
- 70% outperformance vs. SEAF
SEAF Ultra vs. S&P 500 (SPY) vs. SEAF: Since 2019 through 2024 Yearly Bar Chart
This additional performance comes with a slight increase in risk:
- Max drawdown: 32.2% (vs. 29.4% for SEAF, still lower than the S&P 500).
- Standard deviation of returns: 26% (vs. 17.6% for SEAF, reflecting the leveraged nature).
SEAF Ultra Hypothetical Back-tested Performance 2018-2024
Despite the elevated volatility, SEAF Ultra strategically mitigates risk. In bull markets, it increases exposure by utilizing 2x ETFs. In bear markets, it defaults to SEAF signals, avoiding unnecessary leverage. This dynamic approach ensures that leverage is only applied when warranted by market conditions.
The Bottom Line
SEAF Ultra is a bold step forward for investors seeking enhanced returns through a disciplined application of leveraged strategies. By combining the proven sector-selection capabilities of SEAF with intelligent leverage, SEAF Ultra offers a compelling opportunity to outperform traditional benchmarks.