A daily binary switch between BIL (short-term Treasuries, cash-like) and CAOS (tail-risk ETF). If CAOS’s 7-day return > ~2%, invest 100% in BIL; otherwise invest 100% in CAOS. The aim is to beat cash by using CAOS as a hedge only when its recent performance doesn’t trigger the switch to cash. Expect full-day switches with no diversification beyond the two assets, plus costs and volatility from the tail-risk exposure.

- Assets used: BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) and CAOS (Alpha Architect Tail Risk ETF). BIL is essentially cash-like and very low risk; CAOS is a hedge designed to perform in extreme market moves. - Scheduling: The strategy rebalances every trading day. - Decision rule (binary): Look at CAOS’s performance over the last 7 days. If CAOS’s cumulative return is greater than 2 (interpreted as a 2% lookback threshold), the strategy allocates 100% to BIL (cash-like position). If CAOS’s 7-day cumulative return is not above the threshold, the strategy allocates 100% to CAOS (tail-risk hedge). - Weights: The rule uses a single-weight decision (100% in one asset, 0% in the other) rather than splitting between the two assets. The inner weight specification shows 100/100, meaning full exposure to the chosen asset. - Why this might be used: The idea is to stay very defensive when CAOS has recently performed well in the short term (suggesting higher risk/volatility is present) by moving to cash; otherwise you stay in the hedging instrument CAOS to seek potential upside protection. - What you’re not getting: This is not a diversified stock/equity strategy; it’s a two-asset, all-or-nothing allocation with a specific tail-risk trigger. Transaction costs and taxes from daily full switches can matter, and CAOS can underperform for extended periods in calm markets. Ensure you understand the threshold unit (2) in your platform’s terms (percent vs. absolute return) and consider costs before using such a system.

Two-asset BIL/CAOS: out-of-sample Calmar 4.28, max drawdown 0.76%, ~3.24%/yr, Sharpe 2.08, near-zero beta. Cash-like safety plus tail-risk hedge with stronger risk-adjusted performance vs. the S&P.