Most “best index funds 2026” lists are republished SPY + QQQ posts. This one is different: every entry below links to a public, ready, rules-based Arithmos Research index with a 10-year backtest you can audit. We rank by 10-year CAGR, with Sharpe and max drawdown as guardrails — the names that actually beat the S&P 500 in 2026, and the underlying thesis driving them.
Methodology + caveats
- Universe: every official Arithmos Research index with a complete 10-year backtest as of May 2026.
- Benchmark: S&P 500 (SPX), total return.
- Ranking: 10Y CAGR, with Sharpe ratio and max drawdown shown alongside.
- Backtests use Financial Modeling Prep daily prices (Yahoo + Tiingo as fallbacks).
- Past performance does not guarantee future results — this is research, not advice.
The 2026 leaderboard
| # | Index | 10Y CAGR | Sharpe | Max DD |
|---|---|---|---|---|
| 1 | AI Core 3 | +53.5% | 1.17 | −31% |
| 2 | Semiconductors US & Taiwan | +52.6% | 1.05 | −60% |
| 3 | Sovereign AI Infrastructure | +49.7% | 1.04 | −56% |
| 4 | Magnificent 7 Equal-Weight | +44.0% | 1.15 | −30% |
| 5 | Semiconductor Equipment Oligopoly | +31.9% | 0.79 | −55% |
| 6 | China EV & Battery Monopoly | +31.3% | 0.58 | −66% |
| 7 | Consumer Platform Monopoly | +23.4% | 0.79 | −44% |
| 8 | Generational Wealth Transfer | +19.9% | 0.33 | −71% |
| 9 | American Reshoring | +18.9% | 0.70 | −46% |
| 10 | Defence-AI Convergence | +18.2% | 0.54 | −46% |
| — | SPY (S&P 500 baseline) | ~12.6% | ~0.55 | ~−24% |
Themes that drove outperformance
1. AI infrastructure
The biggest wealth-creation event of the decade. Hyperscaler capex on NVIDIA GPUs, Vertiv cooling, and Constellation nuclear power compounded faster than any thematic ETF could keep up with.
2. Concentrated mega-cap tech
Equal-weighted Magnificent 7 (AAPL, MSFT, GOOGL, AMZN, META, NVDA, TSLA) crushed broad market-cap indices. The discipline of quarterly equal-weight rebalancing harvested gains from the winners and topped up the laggards.
3. Reshoring / industrial renaissance
CHIPS Act + IRA funding plus de-globalization tailwinds re-rated US industrial names like Caterpillar, Cummins, Deere, Quanta Services, and Vulcan Materials.
4. Defense + AI convergence
Pentagon software contracts moving toward AI-native vendors (Palantir, Leidos, Booz Allen) lifted defense-tech indices meaningfully above traditional aerospace ETFs.
Themes that didn’t outpace SPY
- GLP-1 obesity boom — pulled back ~16% in 2026 after a frothy 2024–25.
- Psychedelic medicine — clinical setbacks; 10Y CAGR negative.
- Quantum computing — huge volatility; outsize 1Y returns but lumpy multi-year track record.
- Space economy — Rocket Lab carrying the basket; Virgin Galactic and others detracted.
How to actually own one
Three options:
- Buy the ETFs in the same neighborhood (SOXX for semis, SMH for chip giants, XAR for defense). Cleanest if you want a wrapper.
- Own the holdings directly via Arithmos. Click any index above, hit “Export to broker,” pick your brokerage format. Lower fees, tax-loss harvesting, full control.
- Build a custom variant. Swap holdings, change weights, set a different rebalance cadence. Type the change in plain English and Arithmos updates the spec.
Why rebalance cadence matters
A common misread: people compare an annual-rebalance index against a quarterly-rebalance index without controlling for the cadence. Equal-weight indices in particular benefit hugely from frequent rebalancing because it harvests winners systematically. Monthly rebalancing on a hot mega-cap basket can add 200–400 bps a year over the same names left alone.
FAQ
Did anyone really beat the S&P 500 by this much?
Yes — but those returns came from concentrated thematic exposure, which carries materially higher drawdown risk. The trade-off is explicit and the backtests show it.
What’s the cheapest way to own these?
Direct ownership via a basket export at a zero-commission broker. Arithmos charges a flat subscription, not a fund expense ratio.
How often does the leaderboard change?
We refresh backtests daily (cached for 24h). Underlying prices come from FMP. Ranks shift in real time.
Should I just buy the top-ranked index?
Not without sizing it appropriately. The top names also have the biggest drawdowns. A 70/30 split (SPY + thematic) usually beats 100% in either direction over a full cycle.