With a total return of 5.60% for the month, the Barron’s 400 Index (B400) significantly outperformed the broad market in February 2021. The table below compares the return of the B400 to the size benchmarks for the month of February and also for the time period since the current version of the B400 was reconstituted and rebalanced on September 21, 2020.
| Index | Equity Category | Total Return | |
| February 2021 | Since Rebalance* | ||
| Barron’s 400 | GARP | 5.60% | 31.67% |
| Barron’s 400 – FFMCW** | GARP | 0.32% | 12.89% |
| Russell 1K | Large | 2.90% | 18.89% |
| Russell 2K | Small | 6.23% | 48.88% |
| Russell 3K | Broad | 3.13% | 20.59% |
| S&P 500 | Large | 2.76% | 16.96% |
Since the current version of the B400 started trading on September 21, 2020, the index is up 31.67% on a total return basis. Over the same period, the broad market as measured by the Russell 3K is up only 20.59% meaning the B400 has outperformed the broad market by 11.08% over the last five plus months.
The performance relative to large cap indexes is even more remarkable: In the month of February alone the B400 beat the Russel 1K by 2.70% and the S&P 500 by 2.84%. Over the entire time period since the B400’s last reconstitution, the B400 has outperformed the Russell 1K by 12.78% and the S&P 500 by 14.71%. This outperformance speaks to the B400’s investment philosophy which is executed through the GARP-based stock selection implemented semi-annually when the B400 is reconstituted and rebalanced. It might be worth noting that the only passive investment strategy that would have posted a better return than the B400 over this time period would have been a tactical asset allocation strategy overweighted in small cap stocks.
Since the B400 index methodology equally weights the constituent companies selected into the portfolio at each rebalance, it follows that the top performing companies are also the largest contributors to the portfolio’s performance.
In the month of February, the three top gainers in terms of price in the B400 were: Amkor Technology Inc. (AMKR) which posted a gain of 53.93%, Atkore Inc. (ATKR) with a gain of 52.50% and Digital Turbine Inc. (APPS) with a price gain of 44.33%.
The three top gainers in terms of price since the current B400 started trading in September are: Encore Capital Group (ECPG) with a price gain of 32.02%, Meritage Homes Corporation (MTH) with a price gain of 26.75% and Zoom Video Communications (ZM) with a price gain 25.91%.
For the longer run and since inception performance of the B400 click here.
