The Wall Street Journal highlighted today, in its Quarterly Markets Review, how the Dow’s 6.4% rise during the first quarter of this year is the benchmark’s best quarterly performance in 12 years. This is indeed impressive considering the headwinds the market faced during the period, beginning with the turmoil in the Middle East, the resulting rise in oil prices, the devastation following the earthquake and tsunami in Japan and ongoing European debt worries. The rest of the market benchmarks turned in an equally impressive performance with the broad Dow Jones U.S. Total Stock Market Index up 5.6%, the S&P 500 up 5.4% and the Nasdaq Composite ahead 4.8% from where it ended 2010. Another broad market index that had an impressive first quarter and is garnering little attention in the financial media (for now) is the Barron’s 400, which, of course, we have been writing about for some time. For a refresher on its methodology please visit our B400 home page.
The Barron’s 400 rose 8.5% during the quarter ended yesterday, pulling ahead of all the major market benchmarks for the year. Many observers would argue that it should be measured also against equally weighted indexes and we agree. Two widely followed examples we use to compare against the B400 are the S&P 500 Equal Weight, which had a first quarter price-only return of 6.83% and the Value Line Composite Index, up 5.5%. The Barron’s 400 handily beat them both. B400’s top performers this year have been:
-Green Mountain Coffee Roasters (GMCR), up 97% YTD
-IPG Photonics Corp. (IPGP), up 82% YTD
-MicroStrategy Inc. (MSTR), up 57% YTD
-OpenTable Inc. (OPEN), up 51% YTD
-Sturm Ruger & Co. Inc. (RGR), up 50% YTD
-ARIAD Pharmaceuticals Inc. (ARIA), up 47% YTD
-AMERIGROUP Corp. (AGP), up 46% YTD
-Micron Technology Inc. (MU), up 43% YTD
-Big Lots Inc. (BIG), up 43% YTD
-Verifone Systems Inc. (PAY), up 43% YTD
B400’s performance is even more impressive when looking at longer time periods. In the last 52 weeks it has gained 24.5%, almost doubling the Dow and the S&P 500, which are up 12.7% and 12.5% respectively in this time. By the same measure S&P 500 EW gained 19.0% and the Value Line Composite 16.3%. On a three year annualized basis B400 returned 7.8% per year vs. the Dow’s 0.2% and the S&P 500’s 0.1%.
The stock market has had a truly impressive run since the March 2009 lows. Investors buying the broad indexes at the bottom would be up 86% based on the Dow, 94% based on the S&P 500 or even 115% based on the Nasdaq Composite. During this period, from early March 2009 to date, none has been more impressive among the broad indexes than the Barron’s 400, up 138%. Many of our clients, hoping to capture this sort of performance in their portfolios, regularly ask us about a tradable version of the index, which, unfortunately, so far, does not exist. However, this is about to change as a fund version is in the works. We’ll keep our readers and subscribers abreast of its development in coming months. In the meantime we leave you with a new fact sheet on the Barron’s 400 Index, which you may download here.
