HAA Simple: Hybrid Asset Allocation with one asset

May 2008 – Sep 2026	Strategy	SPY
Annual return (CAGR)	11.7%	11.8%
Worst drawdown	-20.0%	-50.7%
Sharpe ratio	0.98	0.67
Volatility	12.0%	19.7%
Annual return since publication (Mar 2023)	14.0%	22.3%

May 1969 – Sep 2026	Strategy	SPY
Annual return (CAGR)	12.7%	10.7%
Worst drawdown	-21.6%	-55.2%
Sharpe ratio	1.09	0.68
Volatility	11.6%	17.2%
Annual return since publication (Mar 2023)	14.0%	22.3%

HAA Simple is the one-asset version of Wouter Keller and JW Keuning's Hybrid Asset Allocation, named in their 2023 paper. It holds the S&P 500 or a safe asset, never both, and changes at most once a month. That makes it one of the easiest tactical strategies to follow by hand.

The idea#

HAA Simple keeps the two filters of the full strategy and drops the diversification:

The canary. TIP, the inflation-protected Treasury fund, must have positive momentum. It is an early warning for the rate and inflation pressure that hurts both stocks and bonds.
The asset itself. US stocks must also have positive momentum of their own.

Only when both are positive does it own stocks.

How it works#

At the close of the last trading day of each month:

Measure 13612U momentum for TIP and SPY. This is the simple average of the 1-, 3-, 6-, and 12-month returns.
If both are positive, hold 100% SPY.
Otherwise hold 100% of the stronger of BIL (Treasury bills) and IEF (7–10 year Treasuries), again by 13612U momentum.

What the backtest shows#

Over the ETF era HAA Simple had the highest risk-adjusted return of the classic strategies we list, with a worst drawdown well under half the S&P 500's. It gained in 2008, when it held Treasuries, and was about flat in 2022.

Since the paper appeared in early 2023 it has made solid gains but trailed the S&P 500. A strategy that is either all stocks or all bonds will sometimes step aside at the wrong time, and three years is a short sample.

When it struggles#

Whipsaws. A single momentum check on one asset can switch out and back in around a brief dip, missing part of the recovery.
Concentration. When it holds stocks it holds only the S&P 500, with no diversification across markets.

Using it on Tactfolio#

The live strategy above runs these rules on daily data. Copy it to try other equity funds in place of SPY, or add it as one piece of a larger strategy.

Year by year

Year	Strategy	SPY
2026*	13.3%	14.0%
2025	7.8%	17.7%
2024	19.1%	24.9%
2023	10.4%	26.2%
2022	-0.7%	-18.2%
2021	28.7%	28.7%
2020	24.5%	18.3%
2019	15.4%	31.2%
2018	13.8%	-4.6%
2017	13.9%	21.7%
2016	13.3%	12.0%
2015	1.3%	1.2%
2014	6.7%	13.5%
2013	15.1%	32.3%
2012	16.0%	16.0%
2011	-0.6%	1.9%
2010	-0.7%	15.1%
2009	6.5%	26.4%
2008*	16.0%	-34.3%

Year	Strategy	SPY
2026*	13.3%	14.0%
2025	7.8%	17.7%
2024	19.1%	24.9%
2023	10.4%	26.2%
2022	-0.7%	-18.2%
2021	28.7%	28.7%
2020	24.5%	18.3%
2019	15.4%	31.2%
2018	13.8%	-4.6%
2017	13.9%	21.7%
2016	13.3%	12.0%
2015	1.3%	1.2%
2014	6.7%	13.5%
2013	15.1%	32.3%
2012	16.0%	16.0%
2011	-0.6%	1.9%
2010	-0.7%	15.1%
2009	6.5%	26.4%
2008	17.9%	-36.8%
2007	3.8%	5.1%
2006	18.6%	15.8%
2005	4.8%	4.8%
2004	10.7%	10.7%
2003	23.9%	28.2%
2002	5.1%	-21.6%
2001	6.5%	-11.8%
2000	0.3%	-9.7%
1999	13.2%	20.4%
1998	16.4%	28.7%
1997	33.5%	33.5%
1996	21.6%	22.5%
1995	29.4%	38.0%
1994	4.0%	0.4%
1993	9.7%	9.7%
1992	7.6%	7.6%
1991	26.1%	30.3%
1990	-1.4%	-3.2%
1989	31.5%	31.5%
1988	2.8%	16.4%
1987	40.5%	5.1%
1986	18.6%	18.6%
1985	31.6%	31.6%
1984	2.4%	6.2%
1983	22.4%	22.4%
1982	37.9%	21.6%
1981	5.0%	-4.9%
1980	36.6%	32.4%
1979	13.9%	18.3%
1978	1.8%	6.5%
1977	-7.6%	-7.2%
1976	23.8%	23.8%
1975	14.3%	37.1%
1974	7.9%	-26.5%
1973	-19.9%	-14.7%
1972	18.9%	18.9%
1971	14.1%	14.1%
1970	9.3%	3.9%
1969*	4.1%	-10.4%

* Partial year.

The rules as implemented

This is the exact tree Tactfolio runs, rebalanced monthly with signals and trades at the close. Open it to inspect or copy it.

Sources and caveats

The single-asset variant named in the source, with SPY as the only offensive asset.
Momentum is 13612U, the equal-weighted average of 1-, 3-, 6-, and 12-month returns, on every universe; cash is the stronger of BIL and IEF.
Signals and trades use the close of the last trading day of each month, as in the source.

Common questions#

What is HAA Simple?#

It is the single-asset variant of Hybrid Asset Allocation by Wouter Keller and JW Keuning (2023). It holds SPY while both TIP and SPY have positive 13612U momentum, and otherwise the stronger of BIL and IEF.

How is HAA Simple different from HAA Balanced?#

HAA Balanced holds the four strongest of eight asset classes while TIP's momentum is positive. HAA Simple uses SPY alone.

How often does HAA Simple trade?#

It checks once a month, at the close of the last trading day, and trades only when the answer changes.