The alternative equity team at Allspring Global Investments predicts the Kansas City Chiefs football team will beat the Philadelphia Eagles in Super Bowl LIX in New Orleans Feb. 9, but it will be close game.
Las Vegas oddsmakers have chosen Kansas City as a 1.5-point favorite to win.
Kevin Cole, a Los Angeles-based portfolio manager for the alternative equity team at Allspring, explained that they use a metric called “NFL Alpha” which objectively evaluates each of the 32 NFL teams’ performances during the regular season. NFL Alpha represents a team’s performance relative to market expectations, he said.
The Eagles have an NFL Alpha of 39.4%, while the Chiefs have a corresponding NFL Alpha figure of 34.8%.
The Eagles have one of the highest regular-season NFL alphas because the Birds won more regular season games than bettors expected.
In contrast, while the Chiefs won 15 of their 17 games, bettors had higher expectations for them, resulting in a lower alpha. In a sense, Cole explained, that makes the Eagles somewhat “overvalued” and the Chiefs “undervalued”-- meaning Kansas City is primed to beat the spread for Sunday's game.
"We have found that the team with the lower alpha tends to cover the spread around 59% of the time across the last 20 post-seasons,” Cole said. “That’s quite a big edge.”
Put another way, among postseason matchups, teams tend to revert to the market’s expectation: Those that outperformed their regular-season expectations by a smaller margin (the ones with lower NFL Alphas) have been more likely to cover their point spreads in the post-season.
Gina Marie N. Moore, a founding partner of AJO Vista, an investment adviser, who is familiar with Allspring’s football predictions, explained that the Eagles have a higher alpha than the Chiefs because “their wins were more out of sync with bettors' expectations; they had some wild wins. For the NFL, if a team wins when bettors have a low expectation for a win, their alpha goes up,” she explained.
Since Allspring started predicting Super Bowls in 2004, the NFL Alpha system has beaten the spread 15 times. Allspring has $605 billion in assets under advisement.
Another asset manager also weighed in on the big game – and he too favors Kansas City.
Skyler Weinand, chief investment officer at Dallas-based Regan Capital, with $2.2 billion in assets, noted that the Chiefs can create history and "Three-Peat" this year, just like the stock market, which has scored big time by posting roughly 25% gains in both 2023 and 2024.
“Led by the Mag Three of Patrick Mahomes, Travis Kelce and Chris Jones, the Chiefs look to bring home the Lombardi Trophy for the third consecutive season,” he said. “The Chiefs Mag Three's combined experience, talent and prowess will make them champions once again.”
That's akin to the S&P 500, which has recorded 25%-plus returns for the past two years on the back of the Mag 7, which could "Three-Peat" in 2025 with the new Trump administration's focus on deregulation, lower rates and lower inflation, Weinand added.
But one asset manager likes the Eagles' chances.
Timothy Tarpening, managing director and portfolio strategist at Pacific Income Advisers, said his investment team might enjoy seeing a Chief's record-setting three-peat, if for no other reason than they dislike conspiracy theories, including all the talk about NFL referees favoring the Chiefs.
“That said, I’ve recently found myself questioning several key referee calls in favor of the Chiefs,” he said.
“This is why, as a strong believer in mean-reversion, we think NFL fans are due for an Eagles upset victory. However, if there is anything less certain in 2025, it’s the U.S. economy and capital markets. We believe heightened uncertainly caused by geopolitical disruptions, tariff and immigration policies, and fiscal policy portend elevated risk premiums. We believe pro-growth policies for deregulation and tax cuts should help to sustain solid nominal economic growth; however, we anticipate significant debt issuance will add to the likelihood of elevated yields and compressed equity multiples in 2025. Therefore, stagflation risk is back on the table.”
Pacific Income Advisers has $2 billion in AUM.
