# Back-testing honestly: windows, survivors, hindsight

> Learn why a back-test's start date, its surviving funds and its hypothetical label change the answer, using ETFIQ's real Strategic 60 benchmark history.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Back-testing honestly: windows, survivors, hindsight

Data as of Nov 10, 2026. Rebuilt every trading night.

ETFIQ's Strategic 60 benchmark returned 15.21% a year over the 3 years to Oct 30, 2026 and 5.91% over the 5 years, both hypothetical.

Advanced Portfolio Design · Lesson 4 of 5 1 2 3 4 5

Tap a window. See what $10,000 grew to in ETFIQ's Strategic 60 benchmark, one rule and four start dates. 1 year 3 years 5 years 10 years Amount (hypothetical) $10,000 Years 3 Strategic 60 yearly rate 15.21% $10,000 after 3 years: Strategic 60 (hypothetical) $15,292. Hypothetical: the rule was frozen Oct 3, 2026, so every window starts before it. Yearly rates to Oct 30, 2026. Step 1: same rule, different windows. Step 2: why. The 5-year window began ten days before the mix's worst fall, −22.31% , Nov 8, 2021 to Oct 14, 2022 . The 3-year window began a year after that low. On $10,000: 5 years: +33.26% , so $13,326 . 3 years: +52.91% , so $15,291 . The 5-year window is the 3-year one with two earlier years in front. Those turned $10,000 into X, then X grew 52.91% . So X × 1.5291 = $13,326 , and X = 13,326 ÷ 1.5291 = $8,715 : a loss of about 13% in the first two years. Step 3: who survived. ETFIQ's prices carry no fund that closed before 2016. Today's funds never meet the failures. Step 4: hindsight. ETFIQ froze this rule Oct 3, 2026 and has tracked it since Oct 5, 2026 . Every window above is hypothetical , because each starts earlier. Step 5: a back-test can't outlast its youngest fund. In lesson 5 , a mix holding IAUM, which began trading Jun 29, 2021 , gets no 10-year result.

### The question

A back-test shows my mix would have done well. How much should I trust it?

### The idea

- A back-test applies a rule (these funds, weights and rebalancing) to past prices to see what would have happened. It is useful, and easy to fool yourself with. Ask three questions: - Which window? Start and end dates can change the answer more than the rule does.

- Which funds? A back-test can only use funds that still have prices. Closed funds are missing, so the past looks better than it was. This is survivorship bias .

- When was the rule chosen? A rule picked today, then run on old prices, uses hindsight . ETFIQ labels those results hypothetical . Only results earned after the rule was fixed are tracked .

### Worked example

The 5 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.

ETFIQ's Strategic 60 benchmark is 60% VT (world stocks) and 40% US bonds (BND and AGG), reset to those weights each month end ( Intermediate lesson 7 ). Every window below ends Oct 30, 2026 .

| Window | Starts | Return a year (compounded) |
| --- | --- | --- |
| 1 year | Oct 31, 2025 | 7.33% |
| 3 years | Oct 31, 2023 | 15.21% |
| 5 years | Oct 29, 2021 | 5.91% |
| 10 years | Oct 31, 2016 | 8.09% |
| Since Jan 2010 | Jan 4, 2010 | 7.52% |

Pick 3 years and the mix looks brilliant; pick 5 and it looks dull.

Only the start date changed.

### The common mistake

"The back-test made 15% a year, so that's what the mix earns." That is the 3-year window, chosen after a fall had ended. Report every window to one end date, with the worst fall, labelled hypothetical.

A second mistake: trusting a back-test that "beat everything." Try enough rules on the same past and one looks great by chance. Choose the rule first, then run every window.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

1. One mix shows 1.72% a year over 2020 to 2022 and 14.33% a year over 2019 to 2021. What changed? A The funds B The weights C The fee D The window: one year dropped, another added Answer: D. The window: one year dropped, another added. swapping 2019 for 2022 swapped a gain for a loss. Not B: the mix did not move. 2. A back-test of today's small-company funds runs from 2005. Some small-company funds closed in 2009. What does that do? A Nothing, since closed funds don't matter B It likely makes the past look worse C It likely makes the past look better than it was D It makes the result tracked Answer: C. It likely makes the past look better than it was. failed funds are left out, so only survivors count. Not A: an investor in 2005 could have held a fund that later closed. 3. A rule was fixed on Mar 1, 2026. Its 5-year result to Oct 30, 2026 is shown. How should it be labelled? A Tracked B Hypothetical C Half tracked D Audited Answer: B. Hypothetical. a window starting before the rule was fixed is hypothetical as a whole. Not C: ETFIQ never splits a window.

### Takeaways

- Show every window to one end date; one window is a choice, not a result.

- Ask which funds are missing: survivors flatter the past.

- A rule chosen today and run on old prices is hypothetical.

### Do it on ETFIQ

Back-test a mix on every window, not just one

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: ETFIQ, Back-testing honestly: windows, survivors, hindsight, data as of Nov 10, 2026. https://etfiq.com/academy/advanced-portfolio-design/back-testing-honestly/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/advanced-portfolio-design/back-testing-honestly/