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Trend-Gated Mega-Cap — research record

Dashboard → https://amindraa05.github.io/trend-gated-megacap/

A point-in-time backtest of a concentrated US large-cap equity rule over 1996–2026, published together with the audit trail behind it. This repository holds the evidence. The engine and the live execution code are kept in a private repository.


The rule, in one paragraph

Hold the fifteen most-traded S&P 500 constituents as they stood at the time. Cap any single name at a quarter of the book. Replace names monthly, but never trim a winner back to its target weight. Scale total exposure to a 30% volatility target. Hold cash whenever the market closes below its 200-day average. No leverage, no shorts.

What it did, and where it failed

Window CAGR Max drawdown $10,000 becomes
2000–2026 19.71% −43.5% $1,186,129
2000–2009 17.66% −35.4%
2010–2017 24.33% −16.5%
2018–2026 17.51% −43.5%
QQQ 2000–2026 8.57% −83.0% $88,682
QQQ 2018–2026 19.94% −35.1%

The bold rows are the point. Since 2018 the index has beaten this rule on both return and drawdown. The advantage came from 2000–2009, when QQQ returned −6.76% a year and this rule returned +17.66%. Whether that matters depends entirely on whether another lost decade arrives.

Why the numbers can be checked

Every claim below maps to a file in evidence/. Full inventory in AUDIT_EVIDENCE.md.

  • Accounting identity recomputed from raw vendor files — worst error 0.046 bps
  • Point-in-time membership checked against 18 real index additions and removals — 0 early, 0 late
  • Delisted companies included from the start; residual bias bounded at 9.3% of position slots
  • Deflated Sharpe across 1,918 trials — 0.9995, p = 0.00055
  • 1,000 random-pick placebo portfolios — the real result sits at the 100th percentile
  • Configuration selected out-of-sample by anchored walk-forward, landing on the family median rather than the in-sample champion
  • Every configuration ever run, winners and failures — evidence/ledger.csv, 1,981 rows

Seven defects were found by these checks — two in the engine, five in the test harness itself. All are documented rather than quietly corrected.

What is not proven

  • It has never been traded. No live or paper fill evidence exists. Every fill in every figure is an assumption about market-on-open execution.
  • The design space was explored on the same history it is measured against. Walk-forward controls which configuration was chosen, not which ideas entered the search.
  • One realised path of market history, resampled.
  • Fifteen names. The worst single-name overnight move cost 19.5% of NAV in a day.

Contents

docs/           the dashboard served by GitHub Pages
evidence/       every result table and raw log the audit claims point to
evidence/ledger.csv    all 1,981 configurations tested
AUDIT_EVIDENCE.md      claim-by-claim inventory, including the gaps

Source data (EODHD end-of-day and point-in-time index membership) is licensed and is not redistributed.


Not investment advice. Not a product. A research record, published with its failures intact.

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Point-in-time backtest of a trend-gated concentrated US mega-cap rule, 1996-2026, published with its full audit trail. Reports the window where the rule loses to the index. Never traded.

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