The backtest
A rating system is only as credible as its track record.
The published factsheet study covers 28 December 2003 to 28 December 2023 and reports a 16.79% annualised return for the MOATEY framework versus 9.72% for the S&P 500 total-return index. These are the figures we quote everywhere on this site.
MOATEY CAGR
Benchmark CAGR (S&P 500 TR)
9.72%
Annualised spread
+7.07 pp
Backtest window
20 years (2003–2023)
The complete methodology, portfolio rules and results are documented in the factsheet & research documents — that study is the single source for every backtest figure on moateyscore.com.
Methodology as described
The following rules describe the backtest as previously communicated; the factsheet is the authoritative source for the exact methodology.
- Universe. All constituents of the S&P 500 at the start of each quarter, restated for index changes.
- Entry. Equal-weighted, rebalanced quarterly. A name enters the portfolio if its MOATEY rating that quarter is "Good" or "Excellent".
- Exit. Sold at the next quarterly rebalance if the rating falls below "Fair" (to Poor or Risky).
- Costs. Gross of trading costs and taxes. Net returns will be lower depending on your broker and jurisdiction.
What this is not
A backtest is evidence, not a promise. Markets change. Factor premia compress. The exact conditions that drove historical returns will not repeat identically. Use this as a calibration of the methodology — not a forecast.
We also openly publish the rating history of every name in our universe. You can audit how a stock's rating moved over time on its detail page — no cherry-picking.
Risk & drawdown
Quality compounders are not crash-proof. The MOATEY portfolio experienced significant peak-to-trough drawdowns during the 2008 financial crisis and the 2022 rate-shock. If a 30% peak-to-trough loss would force you to sell, no rating system can rescue you. Position sizing and patience do the rest of the work.