[Backtest] 5-Year US Megacap Portfolio Performance & Asset Allocation Report

📊 5-Year US Megacap Portfolio Backtest Report

This report presents a comprehensive 5-year historical backtest (July 21, 2021, to June 23, 2026) evaluating dynamic monthly-rebalanced asset allocation strategies using PyPortfolioOpt and Riskfolio-Lib. The asset universe consists of top US market capitalization technology stocks.

⚙️ Backtest Configurations:
  • Universe: AAPL, AMZN, AVGO, GOOG, GOOGL, META, MSFT, NVDA, TSM (9 top US megacap stocks)
  • Rebalancing Frequency: Monthly (Transaction Cost: 0.1% per turnover)
  • Lookback Period: 1 year (252 trading days) for covariance and expected returns calculation
  • GPU Acceleration: PyTorch CUDA (NVIDIA GeForce RTX 4070 Ti)

📈 Performance Comparison Table

Strategy / Portfolio Cumulative Return CAGR Max Drawdown (MDD) Sharpe Ratio
🚀 Max Sharpe (PyPortfolioOpt) 433.44% 40.68% -39.11% 1.09
🛡️ Risk Parity (Riskfolio-Lib) 193.18% 24.52% -44.64% 0.88
⚖️ Equal Weight (Benchmark) 234.40% 27.91% -46.13% 0.94
📉 SPY ETF (Market Benchmark) 72.69% 11.78% -25.36% 0.62

📊 Cumulative Equity Curves (5-Year)

5-Year Equity Curves Chart

Figure 1: Comparison of dynamic allocation model values over time vs passive benchmarks.

🔍 Key Strategy Takeaways

1. The Dominance of Max Sharpe in Tech Bull Cycles

Max Sharpe (PyPortfolioOpt) generated a spectacular return of 433.44%. The model dynamically captured the massive tech rally (particularly NVDA and AVGO) by concentrating weight on the most capital-efficient assets.

2. The Limitation of Risk Parity in Concentrated Universes

While Risk Parity (Riskfolio-Lib) is celebrated for risk mitigation, in a heavily correlated, technology-only universe, it suffered a drawdown of -44.64% in the 2022 bear market. This highlights that risk parity requires a multi-asset universe (bonds, gold, commodities) to successfully perform diversification.

*This performance report was generated automatically by the MoonShot Backtest System.*

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