Holding a 3x leveraged ETF like TQQQ through a full market cycle is a white-knuckle ride. The same leverage that turns a good year great can hand you an 80% drawdown in a bad one. The TQQQ-BIL strategy is one attempt to keep some of the upside while sidestepping the worst of the downside, using a simple rule to move between leveraged stock exposure and short-term Treasuries. This post explores how the TQQQ-BIL strategy works, what a long backtest suggests about whether it beats simply holding TQQQ, and how a Canadian version built on TQQQ.TO and CASH.TO holds up so far. Fair warning on that last part: there is barely any history to judge it on yet.
What the TQQQ-BIL strategy is
At its core the strategy is a rules-based rotation between two holdings:
- TQQQ, a 3x leveraged Nasdaq-100 ETF, for the growth side.
- BIL, a short-term US Treasury bill ETF, for the safe side.
The rule is the interesting part. Rather than trying to predict the market, it sets a steady growth target for the account, checks in on a schedule (quarterly, for example), and compares where the portfolio sits against where the target says it should be. When TQQQ has run ahead of the target, the strategy sells some and parks the proceeds in BIL. When it has fallen behind, it buys more TQQQ using cash from BIL. In plain terms, it sells into strength and buys into weakness, automatically, with no forecasting required. I first came across this approach on Reddit, in r/LETFs, while digging around for trading ideas. Someone there referenced Jason Kelly’s 3/6/9% signal. There was no easy way to backtest it, so I decided to build one myself. To be upfront, I do not subscribe to Jason Kelly’s services. You can watch the whole thing run on the TQQQ-BIL tracker.
Why rotate at all?
If you have read this post on leveraged ETFs, you already know the problem with buying TQQQ and walking away. Leveraged funds bleed value through volatility decay in choppy markets, and their drawdowns are savage. A 3x Nasdaq fund can lose the large majority of its value in a serious bear market and take years to climb back. Buy-and-hold only works if you can sit through that without selling at the bottom, which very few people manage.
A rotation rule is an attempt to impose discipline. It is a pre-committed plan for when to take risk off the table and when to put it back on, decided in calm conditions rather than in a panic. It will not dodge every drawdown, but the goal is to avoid riding the worst ones all the way down.
Does the TQQQ-BIL strategy beat buy-and-hold?
This is the question everyone wants answered, and the honest version is that it depends, with the trade-off being the real story.
Across the research on moving-average and rotation overlays for leveraged Nasdaq funds, a consistent pattern shows up. Rotation tends to reduce drawdowns and improve risk-adjusted returns, meaning more return per unit of stomach-churning. But it often gives up raw upside during strong, uninterrupted bull markets, because it spends some of that time sitting in Treasuries instead of leveraged stock. So “does it beat buy-and-hold” has no single answer. It hinges on the exact rule, the starting date, the trading costs, and which stretch of history you test.
That is exactly why the tracker on this site lets you change the inputs and see for yourself, instead of handing you one number to trust. When you run it, resist the urge to look only at the headline return. The two figures that matter together are CAGR and maximum drawdown. A strategy with a slightly lower return but a far shallower worst case is often the one a real person can stick with. It is also worth checking the rolling-CAGR view, which shows how much your result would have depended on the luck of your start date. For the full picture of how those charts are calculated and what they leave out, see the methodology page.
The Canadian twist: TQQQ.TO and CASH.TO
The original strategy uses US-listed funds, which means a Canadian running it carries US-dollar exposure on top of everything else. The Canadian version swaps in two TSX-listed funds to keep it all in loonies:
- TQQQ.TO, the BetaPro (by Global X) 3x Nasdaq-100 fund, currency-hedged to Canadian dollars, in place of US TQQQ.
- CASH.TO, a high-interest savings ETF, in place of BIL as the defensive leg.
One thing trips people up here, so it is worth stating plainly: US TQQQ and Canadian TQQQ.TO are different funds from different issuers that happen to share three letters. The Canadian version is currency-hedged, so you are betting on the Nasdaq without also betting on the US dollar. You can run this pairing on the Canadian tracker.
A note on registered accounts
The same caution from the leveraged-ETF basics applies here, and it bears repeating because a rotation can still draw down hard. Many Canadian investors deliberately keep a bet like this out of a TFSA or RRSP, for two reasons. A large loss inside a TFSA permanently destroys contribution room you can never get back. And capital losses inside registered accounts cannot be claimed on your taxes, unlike in a non-registered account where a loss can at least offset gains. This is a general consideration rather than advice for your situation, so confirm the details with a tax professional.
Why the Canadian backtest barely counts (yet)
Here is the catch with the Canadian version, and it is a big one. TQQQ.TO only launched in June 2025. That leaves under a year of price history to backtest, and all of it falls inside a bull market. None of the events that truly test a leveraged strategy are in the sample: not the 2018 volatility spike, not the 2020 COVID crash, not the 2022 bear market. A backtest that has never seen a crash cannot tell you how the strategy handles one.
So treat the Canadian numbers as a “let us watch this idea in CAD as it goes” experiment, not as evidence that it works. The upside is that it gets more informative every year it accumulates real history. For now, the US version, with its much longer record, is the better place to study how the rule behaves through actual downturns.
What the backtest does not tell you
Even the longer US backtest has blind spots, and it is more honest to name them than to pretend they are not there:
- Taxes. The backtest ignores them, and a rotation trades more often than buy-and-hold, which means more taxable events in a non-registered account.
- Currency and fills. Real trades have spreads and slippage; the model simplifies both.
- The Canadian sample problem described above.
- The nature of leverage itself. A 3x fund can still lose 90% or more in a severe, prolonged downturn, and no rotation rule removes that possibility entirely.
A backtest is a study of how a strategy behaved, not a promise of what it will do. The methodology page spells out exactly what the math includes and excludes.
Bottom line
The TQQQ-BIL strategy is a disciplined way to take leveraged risk with a built-in plan for stepping aside, and the longer-run evidence suggests it mostly trades away some upside in exchange for noticeably smaller drawdowns. That sounds like a reasonable deal, but it is neither free nor guaranteed, and the Canadian TQQQ.TO version is far too young to lean on. Before forming a view, run the backtests yourself, look at return and worst-case drawdown together, and ask honestly whether you could hold the plan through a real crash. Educational only, never a recommendation.
Educational only, not financial advice. The TQQQ-BIL strategy uses 3x leveraged ETFs, which can lose 90% or more of their value in a severe or prolonged downturn. Backtests are not predictions, and past performance does not guarantee future results. If a page contains affiliate links, they’ll be clearly marked. See the disclaimer for the full version.