LEAF & ROOT September 2026 Performance Update

Introducing ROOT — Risk Off Overlay Toolkit

September gives us a good opportunity to introduce a second index we have been working on: ROOT — Risk Off Overlay Tool.

Most readers are familiar with LEAF, our Leveraged ETF Allocation Formula. LEAF combines a Risk On portfolio with a diversified Risk Off portfolio, with the goal of participating in rising markets while behaving differently during meaningful Nasdaq drawdowns.

ROOT isolates that defensive side of the strategy.

The idea is simple. Many investors already have plenty of equity exposure. ROOT is designed as a collection of alternative return streams that can potentially sit alongside those existing risk assets rather than replacing them.

The current strategy uses exposure to the US dollar, leveraged gold, inverse natural gas, VIX futures, managed futures and global long/short equities. LEAF then combines this defensive toolkit with its Risk On positions, including TQQQ and SVXY.

September Performance

September was a strong month for the Nasdaq:

QQQ: +3.2% LEAF: +2.3% ROOT: -1.5%

LEAF captured approximately 74% of the Nasdaq's upside during the month.

Year to date (as of Sept 30):

QQQ: +20.4% LEAF: +17.7% ROOT: -2.2%

September is actually a useful example of what ROOT is — and what it isn't.

ROOT is not intended to outperform equities during every strong stock market. Its purpose is to provide return streams that behave differently from the Risk On portfolio, particularly when equity markets come under pressure.

That diversification was a headwind in September.

TQQQ was the obvious winner on the Risk On side, gaining approximately 9.4% during the month as the Nasdaq continued higher. SVXY also gained about 1.2%.

The more interesting action was underneath ROOT.

Leveraged gold was the largest drag. UGL fell approximately -13.6% during September. VIXM also declined about -3.6%, which is not surprising during a month of rising equities and relatively subdued volatility. KOLD finished the month only modestly lower, down roughly 1.6%.

There were offsets. CTA Managed Futures gained about 2.0%, while the US dollar exposure gained approximately 2.2% in Canadian-dollar terms.

That mix is the point of ROOT. We do not expect gold, volatility, managed futures, currencies and other alternative strategies to all work at the same time. In fact, we don't want them to.

We want different things working in different environments.

In September, the Risk On side did the heavy lifting. There will be other periods where we expect ROOT to become much more important.

Going forward we will report performance for QQQ, LEAF and ROOT together. This should make it easier to see not only how the full LEAF strategy is performing, but where those returns are coming from.