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.

Conviction Backtesting

Free · 5 results

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

$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 signal only. The Smart Money Verdict shown on stock pages combines additional signals (insider, activist, congressional) that are evaluated separately.

Top Band (80-100)

+24.8%

annualized return

vs S&P 500

+14.7%

same period

Win Rate Spread

+11.3pp

top vs bottom band

Positions Tested

6,473,592

550+ funds · 2014-2025

Detailed Results by Band

Band	Positions	Win Rate	Avg Forward Return	Median Return	Confidence
0-20	332,005	53.8%	+3.7%	+1.4%	High
20-40	4,784,246	57.7%	+3.5%	+2.3%	High
40-60	1,277,268	58.9%	+3.6%	+2.6%	High
60-80	68,930	62.5%	+4.3%	+3.5%	High
80-100	11,143	65.1%	+5.7%	+4.7%	High
S&P 500 (benchmark)	-	78.3%	+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 signals yet.

Apples-to-apples benchmark

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

Methodology

6,473,592 positions from 550+ 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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