Wealthsimple is a whole new kind of investing service. This is the latest installment of our “Data” series, where we dig into the numbers to learn more about how the world of money works.

Some people are good at betting on the NCAA tournament (like President Obama). Some people are bad (most of our office). But we wondered: if we were more-data driven (and we really are data-driven) in our approach, could we figure out which teams make the most financial sense to bet on? And what their return on investment would be? How would that return compare to, you know, building yourself a really robust investment portfolio (or at least buying shares in an ETF that tracks the S&P 500)? To find out, we pitted four heavily-favored teams against each other — some who made it into the Final Four as expected (UNC, Gonzaga), and some who did not (Duke, Kansas).

But first a caveat: betting on sports makes no financial sense.

Graph showing better ROI for betting on UNC games over Duke games

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Our conclusions from our analysis:

1) We knew it! Duke is demonstrably overrated! They beat the Vegas odds less often than the other teams. A lousy return on investment of 0.2%.

2) We didn't know it! Gonzaga is kind of overrated too! We figured they would be way underrated, since they always seem to be the Cinderella story (not the story this year, of course).

3) Kansas does pretty respectably at 4.1%.

4) UNC actually garners a moderately OK return on investment over the last 12 years — 7.1%! About the same as Urban Outfitters stock.

Now here's how UNC does against the S&P 500.

Graph showing how investing in the S&P 500 is a far better idea than betting on UNC

Yeah, UNC is still a terrible investment compared to an even mildly diversified collection of stocks like the S&P 500 — 7.1% versus 154%. If you plan on investing over the next 12 years, we think a brilliantly-constructed portfolio of ETFs tailored to your financial goals is the way to go. Which is probably not surprising at all.

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