Do high-conviction picks outperform?

Based on forward-testing across millions of institutional positions, stocks with higher conviction scores have historically delivered higher average forward returns and win rates compared to lower-conviction positions.

What is the win rate of top conviction stocks?

The top conviction band (80-100 score) has shown the highest win rate in forward testing. Win rates increase monotonically across conviction bands from lowest to highest.

How is the conviction backtest calculated?

HoldingsIntel uses true 1-quarter forward returns: each position's conviction score from quarter Q is matched with the actual stock return in quarter Q+1. This is not backtested curve-fitting but actual forward performance measurement.

Does conviction scoring work?

Across millions of positions since 2014, higher conviction bands have historically delivered higher average forward returns and higher win rates than lower bands. The Backtesting page shows the empirical breakdown by 5-band split (0–20, 20–40, 40–60, 60–80, 80–100).

How is the conviction backtest calculated?

True 1-quarter forward returns: each position's conviction score from quarter Q is matched with the actual stock return in quarter Q+1. This is not backtested curve-fitting — it's actual forward performance measurement using quarter-end prices.

What's the SPY benchmark?

S&P 500 (SPY) measured with the same price source, same time windows, and same method as the conviction bands. No favorable comparisons — both lines use adjusted closing prices and the same quarterly compounding.

Are delisted stocks included?

Yes. Delisted and bankrupt stocks remain in the backtest — including them lowers our numbers but keeps the methodology honest. Survivorship bias would otherwise inflate apparent performance.

Does Conviction Pay Off?

Free · 5 results

Historical evidence that higher conviction correlates with better outcomes. We measure actual stock returns after each quarterly conviction score.

$50,000 into the top 50 hedge fund conviction picks

Equal-weighted basket rebalanced each quarter into the 50 highest-conviction positions across all tracked 13F filers. The S&P 500 line uses the same starting date and price source.

Top 50 hedge fund picks4.8×S&P 5003.7×

$50,000 invested · quarterly rebalance · 2014–2025

Data sourced from SEC EDGAR 13F filings. Not financial advice. Full disclaimer

This backtest validates the 13F-derived conviction score only. The Smart Money Verdict shown on stock pages combines additional sources (insider, activist, congressional) that are evaluated separately.

Top Band (80-100)

+21.0%

annualized median return

vs S&P 500

+14.7%

same period

Win Rate Spread

+11.9pp

top vs bottom band

Positions Tested

6,653,821

551+ funds · 2014-2025

Median Annual Return by Conviction Band

Each bar is the annualized median forward return; win rate is shown beneath it. Both rise with conviction — the dashed line is the S&P 500.

Detailed Results by Band

Band	Positions	Win Rate	Avg 1-Qtr Return	Median 1-Qtr Return	Confidence
0-20	226,725	53.9%	+7.9%	+1.7%	High
20-40	5,014,363	57.9%	+4.1%	+2.6%	High
40-60	1,325,846	58.9%	+4.1%	+2.8%	High
60-80	74,756	63.0%	+4.6%	+3.8%	High
80-100	12,131	65.8%	+6.2%	+4.9%	High
S&P 500 (benchmark)	-	-	+3.5%	-	-

Losers included

Delisted and bankrupt stocks stay in the data. This lowers our numbers but keeps them honest.

Conservative timing

Returns start at quarter-end, but filings aren't public for ~45 days. You couldn't have traded these picks yet.

Apples-to-apples benchmark

S&P 500 measured with the same price source, same time windows, same method. No favorable comparisons.

Methodology

6,653,821 positions from 551+ funds (~80% of US institutional capital), 2014-2025. Quarter-to-quarter returns using adjusted closing prices. Annualized via quarterly compounding. Source: SEC EDGAR 13F filings.

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Does Conviction Pay Off?

Does Conviction Pay Off? - latest quarter results