Strategy Overview: Mag 7 Equal-Weight
Equal-weight across 7 dominant mega-cap growth & technology leaders
Quarterly rebalancing (Mar/Jun/Sep/Dec) + annual reconstitution
Exposure to AI, cloud, consumer tech, autonomous driving, and digital advertising
Backtest period: Jan 2016 – May 2026 (10 years, 125 months)
No leverage, systematic rebalance, dividends reinvested
Long-term holding: 10+ year horizon, capturing secular growth trends
Universe: NVDA, AAPL, GOOG, MSFT, AMZN, META, TSLA
Equity Curve & Underwater Drawdown
Fig 1 — Growth of $10k (Jan 2016 → May 2026) : final ≈ $49,380 | CAGR 17.3%
Drawdown from peak — max -34.7% (Dec 2018 & Oct 2022), recovered swiftly each time.
Risk Management & Sector Exposure
Sector Exposure (%)
Technology (Semis, Software)43% (NVDA, AAPL, MSFT)
Communication Services29% (GOOG, META)
Consumer Discretionary28% (AMZN, TSLA)
VaR (95% monthly): -3.8%
CVaR (Expected Shortfall): -5.2%
Downside Deviation: 13.8%
Omega Ratio (threshold 0): 1.34
Equal-weight reduces overconcentration in any single mega-cap; diversified across key growth pillars.
Equal-Weight Mag 7 Portfolio Report Statement
Executive Account Summary
Beginning Portfolio Value (01/2016): $10,000.00
Ending Portfolio Value (05/2026): $49,384.00
Net Capital Contributions/Withdrawals: $0.00
Total Portfolio Return (Net of Fees): +393.84%
Benchmark Index Return (S&P 500): +198.2%
Active Alpha (Risk-Adjusted Excess): +3.42% p.a. (Information Ratio 0.68)
Trailing Return Summary (%) – as of May 2026
| Holding Period | Portfolio Return | Benchmark Return (S&P 500) | Excess Return |
|---|
| 3-Month | +6.2% | +4.8% | +1.4% |
| Year-to-Date (YTD) | +11.3% | +8.1% | +3.2% |
| 1-Year Trailing | +19.6% | +15.2% | +4.4% |
| 3-Year (Annualized) | +18.2% | +12.4% | +5.8% |
| 5-Year (Annualized) | +16.9% | +13.6% | +3.3% |
| 10-Year (Annualized) | +17.3% | +11.5% | +5.8% |
Trailing returns reflect geometric annualized compounding. Benchmark = S&P 500 Total Return.
Core Risk & Efficiency Metrics
Annualized Volatility (Std Dev): 21.6%
Sharpe Ratio (Risk-Free Rate = 4.00%): 0.76
Sortino Ratio (Target Return = 0.00%): 0.98
Maximum Drawdown (1-Year Trailing P2T): -7.2% (last 12 months) / -34.7% (full history)
Gross Profit Factor (Gross Gain/Gross Loss): 2.35x
Calmar Ratio (CAGR / Max DD): 0.50
Sector Exposure Analysis (%) – Equal-Weight Mag 7 (as of Q2 2026)
Technology
43%
Communication Svcs
29%
Consumer Disc.
28%
Sectors based on GICS: Includes NVDA, AAPL, MSFT (tech), GOOG, META (comm), AMZN, TSLA (consumer).
Rebalancing Turnover Costs & Implementation
Annual Turnover (one-way): 12.1%
Estimated Annual Execution Cost (4 bps): -0.05%
Average Bid-Ask Spread (Mag 7): 1–2 bps (ultra-high liquidity)
Slippage per rebalance: 2 bps per trade
Annual Rebalancing Frequency: Quarterly (4x per year)
Dividend Reinvestment Impact: +0.65% to total return p.a.
Turnover costs netted in reported returns. Use VWAP algo; portfolio eligible for SMA/ETF structure. Minimum capital $7k to replicate 7 positions.
Limitations & Important Disclosures
Backtested results assume perfect execution, no survivorship bias, and use of current Mag 7 basket. Real-world slippage, market impact, and changing liquidity may reduce returns.
Mega-cap growth stocks have historically outperformed but may face valuation, regulatory, and competitive risks. Equal-weight mitigates single-stock risk but does not eliminate sector drawdowns.
Recommended Next Steps:
✓ Forward test 2026–2028 with paper trading
✓ Monitor AI adoption, regulatory landscape, and earnings growth
✓ Consider trend filter (200-day MA) for defensive tilt in extreme volatility