Beating the Benchmark: BetterInvesting 100, Main Street’s Index, Grew 13% Annually for the Past 10 Years Through June, vs. 11.6% for S&P 500 Equal-Weight
July 26, 2018 — At the end of June, the BetterInvesting 100 Index (BIXX), reflecting the portfolios of Main Street investors, increased 13 percent annually for the previous 10 years, versus annual growth of 11.6 percent for the S&P 500 Equal-Weight Index (based on a total return for both indexes in which dividends are reinvested). The BetterInvesting index’s five-year gain was 13.1 percent a year, compared with 12.8% for the S&P 500 EWI.
The index increased 0.3 percent from the end of May. BIXX’s total return index ended June at 455.77, compared with 454.57 at the end of May. Without dividends reinvested, the index was 341.69 at the end of June, an annual increase of 10.0 percent for the past 10 years and of 11.3 percent for the past five years.
The BetterInvesting 100 Index comprises the most popular holdings of investment clubs, employing annual data from the myICLUB.com online club accounting program. Solactive calculates the index, which began on April 9, 2007, at a base value of 150. BIXX is equal-weighted, meaning that each component constitutes the same percentage in the index.
BIXX reflects actual portfolio decisions by individual investors in investment clubs, while other indexes are weighted heavily toward decisions by large institutional investors. BetterInvesting’s individual members and investment clubs tend to have a longer-term focus than do institutions, with clubs’ average holding period for stocks at 3.1 years in 2017, according to myICLUB.com data.
Holding quality stocks selling at reasonable prices for the long term allows clubs and individual investors to benefit from the return these stocks often earn when the market recognizes their excellence. Long-term investing also reduces the costs of trading, which effectively increases return.
In June, the most common stocks acquired by investment clubs that subscribe to club-accounting portal myICLUB, in terms of number of clubs buying, were:
1) Amazon.com (AMZN)
2) CVS Health (CVS)
3) Netflix (NFLX)
4) Facebook (FB)
5) Walt Disney (DIS)
6) Home Depot (HD)
7) AT&T (T)
8) PayPal (PYPL)
9) Visa (V)
10) Apple (AAPL)
BIXX includes companies of all sizes, from small and medium-size firms to the world’s largest companies. To see the top 100 companies held by BetterInvesting members, go to the BetterInvesting website at www.betterinvesting.org.
To track the performance of BIXX, go to the Solactive site: www.solactive.com/?s=betterinvesting+100.