PORTFOLIO COMPARISON / ONE VARIABLE

Magnificent 7 Backtest: An Equal-Weight Portfolio

Build an equal-weight Magnificent 7 portfolio backtest and compare its concentration, return path, and drawdowns with a broad-market reference.

Market termWidely followed mega-cap basketEqual-weight US mega-cap stocksLed its reference in this test

HISTORICAL BACKTEST RESULT

100% SPY vs Equal-weight Magnificent 7

100% SPY Equal-weight Magnificent 7
2016-08-22 → 2026-07-31 · 2496 common sessions
100% SPY$38,37314.5% annualized · -33.7% max drawdown
Equal-weight Magnificent 7$132,98829.8% annualized · -52.5% max drawdown

Historical calculation from cached Marketstack EOD data. Annual rebalancing, $10,000 initial value, nominal USD before fees and taxes. The disclosed portfolio definitions—not an AI model—produce the result.

RUN THIS PORTFOLIO

Change the rule, then compare the new result.

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WHAT TO COMPARE

Read the trade-off as a system.

  1. 01Ending value
  2. 02Maximum drawdown
  3. 03Concentration risk
  4. 04Relative performance by period

WHEN TO LOOK

Locate where the difference appeared.

Meta’s public-market history onwardMega-cap leadership2022 drawdownRecent AI-led markets

A useful comparison shows whether an advantage was broad or created by one unusually favorable period. Review the portfolio backtest methodology to understand how the same rules are applied across a shared data window.

PORTFOLIO RULE / DISCLOSED IMPLEMENTATION

Transparent equal-weight implementation

This is a transparent editorial definition of the widely used label, not an index or a recommendation.

AAPLApple Inc.Apple Inc.US large-cap stockA US-listed consumer technology company.14.29%Apple
AMZNAmazon.com, Inc.Amazon.com, Inc.US large-cap stockA US-listed e-commerce and cloud-computing company.14.29%Amazon
GOOGLAlphabet Inc. Class AAlphabet Inc. Class AUS large-cap stockA US-listed internet and advertising company.14.29%Alphabet
METAMeta Platforms, Inc.Meta Platforms, Inc.US large-cap stockA US-listed social technology company.14.29%Meta Platforms
MSFTMicrosoft CorporationMicrosoft CorporationUS large-cap stockA US-listed software and cloud-computing company.14.29%Microsoft
NVDANVIDIA CorporationNVIDIA CorporationUS large-cap stockA US-listed semiconductor and computing company.14.29%NVIDIA
TSLATesla, Inc.Tesla, Inc.US large-cap stockA US-listed electric vehicle and energy company.14.29%Tesla

REBALANCINGAnnual rebalancing. GOOGL is used as the single Alphabet share class.

DATA WINDOWThe calculation begins at the first common Marketstack EOD date for all seven securities; it cannot represent the basket before Meta’s IPO history.

STRATEGY CONTEXT

What this portfolio strategy means.

A short definition, the reason investors return to it, and the historical context behind the name. It is context for a backtest—not an investment recommendation.

What it is

The Magnificent 7 is a media shorthand for Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla. This page defines an equal-weight version of that seven-stock basket and compares it with a broad US equity reference. Equal weighting is intentional: it exposes the group definition without allowing the largest company’s market capitalization to determine most of the result.

Why investors use it

Investors follow the group because these companies became unusually visible drivers of US large-cap technology leadership and AI-related market narratives. A defined basket is useful for understanding concentration: it shows whether a headline about seven companies describes diversified equity exposure or a much narrower portfolio with large company-specific, sector, and valuation risks.

Historical context

The label became widespread in 2023 as the group’s market influence and earnings expectations attracted attention. It followed earlier labels such as FANG and FAANG, but it is not a standardized index with one mandatory methodology. That is why the page fixes every constituent, weight, and rebalancing rule, and begins only where the selected securities share observable market data.