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The "Magnificent 7" portfolio typically refers to seven high-performing technology and growth stocks that have significantly influenced market indices due to their substantial market capitalizations and strong performance.
These companies are major players in their respective sectors, contributing significantly to the performance of major stock indices like the S&P 500 and Nasdaq.
The backtesting period is limited by the inception date of Meta Platforms Inc. (META): May 18, 2012.
A quick overview of the assets within the portfolio, its performance and main metrics.
The portfolio consists of 7 stocks.
| Name / Ticker | Type | Currency | Inception | Weight |
|---|---|---|---|---|
Apple AAPL (US0378331005) | Stock | USD | Dec 12, 1980 | 14.29% |
Microsoft Corporation MSFT (US5949181045) | Stock | USD | Mar 13, 1986 | 14.29% |
Alphabet Inc. GOOG (US02079K1079) | Stock | USD | Aug 19, 2004 | 14.29% |
Amazon.com, Inc. AMZN (US0231351067) | Stock | USD | May 15, 1997 | 14.29% |
NVIDIA Corporation NVDA (US67066G1040) | Stock | USD | Jan 22, 1999 | 14.28% |
Meta Platforms Inc. META (US30303M1027) | Stock | USD | May 18, 2012 | 14.28% |
Tesla, Inc. TSLA (US88160R1014) | Stock | USD | Jun 29, 2010 | 14.28% |
The backtest spans over a period of 13 years. With an annual return of 41.11% for The Magnificent Seven Portfolio, the cumulative return over that period amounts to 7337%.
| Portfolio Score | The Magnificent Seven Portfolio |
|---|---|
| Portfolio Score |
| Returns | The Magnificent Seven Portfolio |
|---|---|
| Month-to-Date | 7.1% |
| Year-to-Date | 53.43% |
| 3M | 11.19% |
| 6M | 24.54% |
| Annualized Return (3Y) | 19.25% |
| Annualized Return (5Y) | 50.56% |
| Annualized Return (10Y) | 40.46% |
| Annualized Return (All, 12.5Y) | 41.11% |
| Risk | The Magnificent Seven Portfolio |
|---|---|
| Annual Volatility | 27.78% |
| Max Drawdown | -49.78% |
| Sharpe Ratio | 1.38 |
| Sortino Ratio | 2.01 |
| Adjusted Sortino Ratio | 1.42 |
With a projected annual return (CAGR) of 41.11% and an initial investment of $10,000, The Magnificent Seven Portfolio would have the following projected capital growth over the next 50 years.
| Year | Starting Capital | Ending Capital | Total Gain | Avg Monthly Gain | Cumulative Return |
|---|---|---|---|---|---|
| $10,000 | $14,111 | $4,111 | $343 | 41.1% | |
| 5 | $55,949 | $78,949 | $23,000 | $1,917 | 689% |
| 10 | $313,024 | $441,708 | $128,684 | $10,724 | 4,317% |
| 15 | $1,751,326 | $2,471,295 | $719,970 | $59,997 | 24,613% |
| 20 | $9,798,415 | $13,826,544 | $4,028,128 | $335,677 | 138,165% |
| 50 | $300,531,219,104 | $424,079,603,278 | $123,548,384,174 | $10,295,698,681 | 4,240,795,933% |
A detailed look at the returns of the portfolio.
| Portfolio | All (12.5Y) | 10Y | 5Y | 3Y | 1Y |
|---|---|---|---|---|---|
| The Magnificent Seven Portfolio | 41.11% | 40.46% | 50.56% | 19.25% | 56.77% |
| Year | The Magnificent Seven Portfolio |
|---|---|
| 2012 | 1.91% |
| 2013 | 92.64% |
| 2014 | 22.76% |
| 2015 | 41.55% |
| 2016 | 37.26% |
| 2017 | 50.37% |
| 2018 | -0.8% |
| 2019 | 50.75% |
| 2020 | 160.93% |
| 2021 | 52.66% |
| Portfolio | Positive Years | Negative Years | Positive Ratio | Best Return Years | Worst Return Years |
| The Magnificent Seven Portfolio | 11 | 2 | 84.62% | 13 | 13 |
Let's analyze how much risk the portfoliohas.
A drawdown represents the period of decline an investor experiences between a portfolio's peak (new high) and its subsequent low, also known as the valley (before it begins to recover). The table below highlights the five largest drawdowns encountered by the portfolio.
| Drawdown period | Recovery period | Total | |||||
|---|---|---|---|---|---|---|---|
| Max drawdown | Start | Valley | # Months | End | # Months | # Months | Chart |
| -49.78% | 2021-11-22 | 2022-12-28 | 13 | 2023-07-03 | 6 | 19 | |
| -34.9% | 2020-02-20 | 2020-03-18 | 1 | 2020-05-20 | 2 | 3 | |
| -28.93% | 2018-10-02 | 2018-12-24 | 3 | 2019-10-24 | 10 | 13 | |
| -19.97% | 2015-12-30 | 2016-02-09 | 1 | 2016-04-06 | 2 | 3 | |
| -18.59% | 2020-09-01 | 2020-09-08 | 0 | 2020-11-24 | 3 | 3 | |
| -18.36% | 2024-07-11 | 2024-08-05 | 1 | 2024-11-06 | 3 | 4 | |
| -14.03% | 2018-03-13 | 2018-04-02 | 1 | 2018-06-01 | 2 | 3 | |
| -13.8% | 2023-07-19 | 2023-10-26 | 3 | 2023-11-14 | 1 | 4 | |
| -13.75% | 2013-10-21 | 2013-11-20 | 1 | 2014-01-15 | 2 | 3 | |
| -13.66% | 2021-02-09 | 2021-03-08 | 1 | 2021-04-08 | 1 | 2 | |
The Magnificent Seven Portfolio took approximately 12 months on average to recover from major drawdowns of 20% or more. The largest drawdown reached -49.78% and the longest drawdown period lasted 19 months.