CORAL GABLES, Fla., Feb. 12, 2025 (GLOBE NEWSWIRE) — MarketGrader, a leader in smart beta investment solutions, today announced the vast majority of the firm’s MarketGrader Indexes beat their passive equity benchmarks and actively managed peers1 in 2024. The outperformance of MarketGrader’s Indexes relative to both their stock market benchmarks and active peers was even more pronounced over the recent three- and five-year windows.
“2024 was another great year for MarketGrader Indexes when compared to both widely-followed passive benchmarks and peer groups of active managers. Our strategies were again rewarded for identifying consistent creators of economic value and unemotionally selling those companies whose fundamentals no longer held up. The level of outperformance persistence that MarketGrader Indexes demonstrate over multi-year windows is rare in the world of asset management and speaks to the efficacy of our proprietary growth at a reasonable price (GARP) + Quality methodology,” said Carlos Diez, Founder and CEO of MarketGrader.
Some statistical highlights of MarketGrader’s fundamentals-based stock selection indexes relative to market capitalization weighted indexes include:
- 68% of MarketGrader Indexes outperformed their benchmarks across global markets in 2024.
- 18 out of 19 (95%) MarketGrader Core U.S. Indexes outpaced their benchmark in 2024, and over the recent three-, five- and ten-year windows.
- Returning 37.1% and 36.7%, the top performers in 2024 were the MarketGrader U.S. Large Cap Select 50 Index and its 100 stock parent index, the MarketGrader U.S. Large Cap Core Index, outpacing the S&P 500’s 25% return.
- With a 22.4% return, MarketGrader’s US Large Cap Value Index beat the Russell 1000 Value Index by over 800 basis points in 2024, trouncing the benchmark by nearly 500 bps over 10 years.
- Nine out of every 10 MarketGrader Indexes lead their bogey on an annualized basis over the last decade. In contrast, over the recent 10-year period, 96% of Large-Cap Core active funds underperformed the S&P 500, while 90% of All Domestic active funds, 81% of active International funds and 86% of active Emerging Markets funds underperformed their benchmarks, according to SPIVA.
When comparing MarketGrader Indexes to active managers, some notable highlights include:
- 80% of MarketGrader Indexes ranked in the top half of their peer group in 2024 (77% of U.S. indexes and 83% of international indexes).
- 92% of MarketGrader Indexes ranked in the top half of their peer group over five years (89% of domestic and 95% international indexes).
- Top decile: Over five years, 73% of MarketGrader Indexes ranked in the top 10% of their active manager peer group (55% of U.S. indexes and 81% of international indexes).
- The market cap weighted version of the Barron’s 400 Index (B400X), live since 2007, ranked in the top 6% among 1,911 active managers in Morningstar’s All Cap U.S. Equity Category in 2024, and top 5% over five years.
“It’s been over twenty years since we launched our first index using our fundamentals-based GARP + Quality framework to picking index constituents. These results show that our unique rules-based approach to indexing transcends geographies, market cycles, interest rate regimes, and stock market sector, size and style segments. Index investors can be stock selectors, harnessing the underlying market return (beta) while adding excess returns (alpha) by systematically choosing only the best companies. The persistence of alpha in our indexes makes them an attractive alternative to actively managed funds, for whom consistent outperformance is famously elusive,” continued Diez.
MarketGrader currently publishes 89 indexes, 47 across domestic U.S. equities and 42 on foreign / ex-U.S. stocks. The indexes cover regions, countries, sectors, styles and income. All MarketGrader’s indexes are fully replicable, transparent and rules-based with screens for constituent liquidity to ensure tradability. Further index product development plans are in the works, including an expansion of the company’s U.S. sectors lineup, new Middle East-focused indexes and single country indexes for Asia Pacific and Europe.
Asset managers, wealth managers, institutions and investment platforms can license MarketGrader’s indexes for the basis of ETFs, mutual funds, annuities, model portfolios or more custom delivery like direct indexing. For more information on the index library and for index licensing opportunities, please write the MarketGrader team.
MarketGrader Indexes vs Stock Market Benchmarks—2024 Report Card: http://ml.globenewswire.com/Resource/Download/0acf2cf6-7f1d-406c-b713-143071506b70
ABOUT MARKETGRADER
MarketGrader.com Corp. (“MarketGrader”) founded in 1999, is a Miami-based provider of global equity research and index-based solutions. The company’s mission is to become the leading provider of next generation Smart Beta investment solutions, helping investors achieve superior risk-adjusted returns by identifying and owning the highest quality companies in the world. MarketGrader’s proprietary “GARP + Quality” methodology is used to screen over 41,000 publicly traded companies across 92 countries, representing over $127 trillion in market capitalization. Over 100 Smart Beta indexes have been created using MarketGrader’s methodology. MarketGrader delivers smart beta solutions in three ways; 1) licensing its indexes to investment management firms; 2) offering smart beta portfolio solutions to wealth managers; and 3) providing access to their proprietary GARP + Quality ratings to retail and institutional clients. Institutional clients include Dow Jones, SS&C ALPS, VanEck and BMO. In 2007, MarketGrader created the Barron’s 400 Index in partnership with Barron’s, America’s premier financial magazine. Follow MarketGrader on X @MarketGrader and connect on LinkedIn. For more information, please visit www.marketgrader.com.
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1 Performance for all actively managed funds was gross of fees, providing a fair comparison against MarketGrader Indexes, which do not have management fees or trading costs. Source: Morningstar Direct.
Media Contact
Paul Damon for MarketGrader
+1 802.999.5526
paul@keramas.net
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