The Test Bench › index_rule

Does Nasdaq-100 (QQQ) actually work?

WINNER

Beat its benchmark on the honest footing.

The claim

Nasdaq-100 is the index to own — What people actually buy

What we did

Tested against Cap-weight S&P 500, buy & hold, 2004-2026, buy & hold, adjusted total-return.

The result

Result: 15.0 %/yr buy & hold (2004-2026)

+15.0%/yr, Sharpe 0.76, worst drawdown -53% (2008 -42%, 2022 -33%)

Verdict

Highest return AND best risk-adjusted return on the board (+15.0%/yr, Sharpe 0.76) -- but the tech concentration that drove it also drove the worst crashes (-42% in 2008, -33% in 2022). The most reward, and the scariest ride to get it.

What the test did and did not do

survivorship-free universe
net of real costs
tested out of sample
point-in-time data
checked for look-ahead

Almost nobody publishing a backtest says which of these they did. We list the ones we failed as well as the ones we passed.

Tested 2026-06-23. The same treatment, applied to every other system, is on the test bench.

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Written with AI assistance from our own test database. The numbers are computed, not composed.
General market commentary for education, not personalised investment advice. Backtested results are hypothetical. Trading carries a real risk of loss.