In honor of the Final Four this weekend, Composer is hosting a competition of symphonies. What I want to know is: who ya got?! Throw a comment below for your pick.

For our face-off, we selected four symphonies with very different compositions: simple, complex, leveraged, and niche.

Imagine the following as an intimate interview with each contender. You know, get to know them and understand what makes them tick. And, for each symphony, I’ll give you my take on the strategy.

The winner? The one you choose to invest in.

Let’s take a look at the contenders:

‍The Buffett

‍Tale of the Tape

In the NCAA tournament, a team’s record throughout the season determines its seed. For our symphonies, we use annualized returns over the last ten years.

March 29th, 2012 - March 29th 2022

The seeding:

As we know, past returns are not indicative of future performance. Your job is to pick the symphony that best fits your portfolio over the next ten years.

Hedgefundie’s Excellent Adventure became an internet sensation and was the topic of one of our earliest blogs. Now the refined version sits as the #1 seed in our competition. Let’s kick the tires and see if the symphony can live up to the hype.

When I begin reviewing a symphony, I like to collapse all of the blocks so I can understand the logic. Then, I click into each bucket to see how each one works.

This symphony is Risk-Off if SPY has experienced a Drawdown of 5% or more over the past two weeks. Otherwise, the symphony is Risk On. The core, Risk On, part of this strategy is a simple risk parity strategy of 55% UPRO (3x leveraged S&P 500) and 45% TMF (3x leveraged 20Y+ Treasuries). The Risk Off branch of the symphony equally weights gold, Treasury Inflation-Protected Securities (TIPS), and short-term bonds. This combination of relatively less risky assets offers a safe haven for the symphony in times of market stress.

Using the allocation graph in the Composer editor, you can see how often the strategy shifts between each state.

March 29th, 2012 - March 29th, 2022

Remember from the Understanding Leveraged ETF blog that volatility can significantly impact returns. Hedgefundie’s Excellent Adventure Refined attempts to mitigate this issue and avoid large drawdowns by shifting to Risk-Off.

Hedgefundie’s Excellent Adventure Refined is relatively simple and easy to grasp in a few minutes. I like that. However, it also employs leveraged ETFs, which ratchets up the due diligence and risk tolerance required by investors. If you need proof, look at the 1-year returns for the strategy:

March 29th, 2012 - March 29th, 2022

A combination of falling bond prices and a pull-back in stocks was a potent 1-2 punch.

Next up is The Buffet—the old guard. Of the final four, it’s the simplest strategy in the running. I commented on the symphony in the backtesting blog: