Quality Growth
Owns the 15 S&P 500 companies with high returns on capital whose revenue growth is speeding up, from their latest SEC filings. Rebalanced monthly.
LiveS&P 500 (point-in-time in the backtest)15 holdingsMonthly (last trading day)
Backtest basis. Point-in-time SEC quarterly filings: every number is used only from the day it was filed, as first reported.
Return over
+2.0%
SPY +0.4%
1D
+2.0%
holdings
1W
-7.6%
holdings
1M
-8.6%
holdings
3M
+5.8%
holdings
YTD
+98.6%
holdings
1Y
+135.2%
holdings
Current holdings at today's weights over each period (hypothetical).
How it works
What it owns
The 15 S&P 500 companies that combine a high return on invested capital (top half of the index) with revenue growth that is accelerating: the last two quarters grew faster, year over year, than the two before. Ranked 50/50 on return on capital and growth (trailing-12-month growth plus the acceleration). Each gets 1/15 (about 6.7%).
Where the numbers come from
Quarterly 10-Q and 10-K filings from SEC EDGAR. Each figure counts only from its filing date and as first reported, so the backtest never uses a number before investors could have seen it, or a later restatement.
How it was chosen
12 versions (return on capital vs gross profitability vs both, 10 vs 15 names, with or without a large-cap tilt) were tested on 2016-2021 only. The highest in-sample return won, and 2022-2026 was then run once, untouched.
When it trades
On the last trading day of each month it re-scores every S&P 500 company and swaps names that fell out of the top 15. Turnover is about 25% a month.
What can go wrong
It leans toward fast-growing, highly profitable businesses, so it can crowd into one theme (tech hardware, semiconductors) and overlaps with momentum. Banks and insurers rarely qualify because return on invested capital isn't meaningful for them.
Current holdings
Signal date 2026-09-30 · next rebalance Fri Oct 30, 2026 · live tracked portfolio →
Changes vs 2026-08-31: Buy SMCI, NTAP · Sell ORCL, TPL
SNDK Sandisk
6.7%
Score 0.98
Information Technology · last $1,299.30 · ROIC 89% · revenue +175% (TTM) · growth accelerating +269.4 pts · latest quarter 2026-07-03 · stock page →
MU Micron Technology
6.7%
Score 0.96
Information Technology · last $878.84 · ROIC 61% · revenue +167% (TTM) · growth accelerating +219.7 pts · latest quarter 2026-05-28 · stock page →
NVDA Nvidia
6.7%
Score 0.95
Information Technology · last $214.13 · ROIC 65% · revenue +83% (TTM) · growth accelerating +27.7 pts · latest quarter 2026-07-26 · stock page →
APP AppLovin
6.7%
Score 0.95
Communication Services · last $266.13 · ROIC 115% · revenue +29% (TTM) · growth accelerating +19.5 pts · latest quarter 2026-06-30 · stock page →
FIX Comfort Systems USA
6.7%
Score 0.95
Industrials · last $1,439.07 · ROIC 103% · revenue +46% (TTM) · growth accelerating +14.9 pts · latest quarter 2026-06-30 · stock page →
STX Seagate Technology
6.7%
Score 0.94
Information Technology · last $639.01 · ROIC 80% · revenue +34% (TTM) · growth accelerating +24.9 pts · latest quarter 2026-07-03 · stock page →
DELL Dell Technologies
6.7%
Score 0.93
Information Technology · last $451.71 · ROIC 52% · revenue +49% (TTM) · growth accelerating +47.5 pts · latest quarter 2026-07-31 · stock page →
FICO Fair Isaac
6.7%
Score 0.92
Information Technology · last $771.19 · ROIC 79% · revenue +24% (TTM) · growth accelerating +17.2 pts · latest quarter 2026-06-30 · stock page →
MPC Marathon Petroleum
6.7%
Score 0.91
Energy · last $478.07 · ROIC 83% · revenue +15% (TTM) · growth accelerating +32.4 pts · latest quarter 2026-06-30 · stock page →
TER Teradyne
6.7%
Score 0.90
Information Technology · last $325.00 · ROIC 35% · revenue +58% (TTM) · growth accelerating +71.4 pts · latest quarter 2026-06-28 · stock page →
SMCI Supermicro
6.7%
Score 0.88
Information Technology · last $31.63 · ROIC 31% · revenue +78% (TTM) · growth accelerating +54.0 pts · latest quarter 2026-06-30 · stock page →
APH Amphenol
6.7%
Score 0.87
Information Technology · last $79.35 · ROIC 58% · revenue +54% (TTM) · growth accelerating +5.4 pts · latest quarter 2026-06-30 · stock page →
NTAP NetApp
6.7%
Score 0.86
Information Technology · last $203.80 · ROIC 61% · revenue +13% (TTM) · growth accelerating +20.5 pts · latest quarter 2026-07-31 · stock page →
PLTR Palantir Technologies
6.7%
Score 0.85
Information Technology · last $186.03 · ROIC 27% · revenue +79% (TTM) · growth accelerating +22.4 pts · latest quarter 2026-06-30 · stock page →
INCY Incyte
6.7%
Score 0.85
Health Care · last $113.07 · ROIC 59% · revenue +21% (TTM) · growth accelerating +6.1 pts · latest quarter 2026-03-31 · stock page →
On the bubble Preview
From prices through 2026-10-16 · top 15 make the cut · next rebalance Fri Oct 30
0 likely to enter0 at risk of leaving
APH Held Amphenol
#12Safe for nowNTAP Held NetApp
#13Holding on, near the cutoffPLTR Held Palantir Technologies
#14Holding on, near the cutoffINCY Held Incyte
#15Holding on, near the cutoff
ORCL Oracle Corporation
#16Just outside
TPL Texas Pacific Land Corporation
#17Just outside
VLO Valero Energy
#18Just outside
ROST Ross Stores
#19Just outside
ABNB Airbnb
#20Just outsidePreview, not final. This re-runs the model's rules on the latest daily data. Ranks can change before the Oct 30 close, and the official holdings are set only on rebalance day. Not a recommendation to trade ahead of it.
Backtest
2016-10 to 2026-09 (120 months), after 10 bps per side trading costs. Growth of $10,000, log scale.
Backtest only counts stocks after they joined the S&P 500.
Quality GrowthSPY
| In-sample Oct16–Dec21 | Out-of-sample Jan22–Sep26 | Full | |
|---|---|---|---|
| Annual return | +23.1% | +14.7% | +19.1% |
| SPY | +18.3% | +12.0% | +15.2% |
| Excess vs SPY | +4.8% | +2.8% | +3.8% |
| Volatility | 16.8% | 22.4% | 19.6% |
| Sharpe (rf=0) | 1.33 | 0.72 | 0.99 |
| Max drawdown | -18.8% | -12.0% | -18.8% |
| SPY max drawdown | -19.4% | -20.2% | -23.9% |
| Turnover / month | 24.8% one-way | ||
| Best / worst year | +37.4% (2021) / -12.3% (2022) | ||
Methodology: earlier, looser backtest
Until Oct 19, 2026 this page showed a backtest that used today's index members for the whole history, so it could "buy" stocks before they joined the index (often right after their biggest run-ups). That version returned +29.4% a year in-sample, +32.1% out-of-sample and +30.6% over the full period (max drawdown -15.9%). The figures above replace it.
Read this before trusting the numbers. Rules fixed on 2016-2021 data only (12 variants tried; highest in-sample return chosen), then run once on 2022-2026. Fundamentals: SEC quarterly filings, each number as first filed and used only from its filing date (no restatements, no look-ahead). Return on invested capital = trailing-12-month operating income x (1 - 21%) / (equity + debt - cash). Backtest only counts stocks after they joined the S&P 500. Membership is point-in-time: a stock is eligible only while it was actually in the index on the rebalance date (it can't be picked before it joined, or after it was removed). Former members that still trade are included; companies that were acquired or delisted have no price data and are still missing, so some survivorship bias remains. Rebalanced at each month-end close; signals use only data available at that close. Updated Oct 19, 2026: re-run on the complete filings data set (the first strict run used an incomplete copy). Previous figures: 25.2% in-sample, 16.4% out-of-sample, 21.0% full period. Costs: 10 bps per side on every dollar traded; no taxes or slippage beyond that; cash earns 0%. Past results are not a forecast.
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