Our Focus List Stocks: Long Model Portfolio, the best of our Long Ideas, and our Focus List Stocks: Short Model Portfolio, the best of our Danger Zone picks, beat the Risk Free Rate (RFR) [1] as a long/short portfolio by 22% from the start of 2021 through 1H25. See Figure 1. This outperformance underscores how important reliable fundamental research is.
Through the first half of 2025, however, the Model Portfolio underperformed as a long/short portfolio by 7.8%. See Figure 2.
Figure 1: Focus List Stocks: Long/Short Performance vs. RFR: 2021 Through 1H25
Sources: New Constructs, LLC
Note: Gain/Decline performance analysis excludes transaction costs, dividends and rebates. The Risk-Free Rate is based on the 3-month T-bill.
The long portfolio was up 0.2% while the short portfolio fell 6% for a net return of -5.8% compared to the Risk-Free Rate at +2% in 1H25. Note that short portfolios outperform when they fall more than the benchmark.
Figure 2: Focus List Stocks: Long/Short Performance vs. Risk-Free Rate: 1H25
Sources: New Constructs, LLC
Note: Gain/Decline performance analysis excludes transaction costs, dividends and rebates. The Risk-Free Rate is based on the 3-month T-bill.
Figure 3 provides more details on the Model Portfolios’ performance, which includes all stocks present in the Model Portfolios at any point in 1H25.
Figure 3: 1H25 Long/Short Performance of Stocks in the Focus List Model Portfolios
Sources: New Constructs, LLC
Professional and Institutional members get real-time updates and can track all Model Portfolios on our site. The Focus List Stocks: Long Model Portfolio leverages superior fundamental data, which provides a novel alpha.
We’re here to help you navigate these turbulent times. Our uniquely rigorous fundamental research consistently earns #1 rankings in several categories on SumZero.
Check Out the Indices Based on New Constructs Research
While we’re writing about how our Focus List Stocks Model Portfolios find winning stocks, we should highlight the indices we’ve developed with Bloomberg’s Index Licensing Group. All three outperformed the S&P 500 in 1H25. See Figures 4-6.
- Bloomberg New Constructs Core Earnings Leaders Index (ticker: BCORET:IND)
- Bloomberg New Constructs Ratings VA-1 Index (ticker: BNCVA1T:IND)
- Bloomberg New Constructs 500 Index (ticker: B500NCT:IND)
The Bloomberg New Constructs Core Earnings Leaders Index beat the S&P 500 by over 7% in 1H25. Our Index (ticker: BCORET:IND) was up 13.9% while the S&P 500 was up 6.8%. That’s pretty good! See Figure 4 for details.
Figure 4: Bloomberg New Constructs Core Earnings Leaders Index Outperforms the S&P 500 in 1H25
Sources: Bloomberg as of July 4, 2025
Note: Past performance is no guarantee of future results.
The “Very Attractive Stocks” Index beat the S&P 500 by over 0.5% in 1H25. Bloomberg’s official name for the index is Bloomberg New Constructs Ratings VA-1Index (ticker: BNCVAT1T:IND). Figure 5 shows it was up 7.3% while the S&P 500 was up 6.8%.
Figure 5: Very Attractive-Rated Stocks Strongly Outperform the S&P 500 in 1H25
Sources: Bloomberg as of July 4, 2025
Note: Past performance is no guarantee of future results.
Our “Core-Earnings Weighted S&P 500” Index beat the S&P 500 by over 0.3% in 1H25. Bloomberg’s official name for the index is Bloomberg New Constructs 500 Total Return Index (ticker: BNCVAT1T:IND). Figure 6 shows it was up 7.1% while the S&P 500 was up 6.8%.
Figure 6: Bloomberg New Constructs 500 Index Strongly Outperforms the S&P 500 in 1H25
Sources: Bloomberg as of July 4, 2025
Note: Past performance is no guarantee of future results.
This article was originally published on July 15, 2025.
Disclosure: David Trainer, Kyle Guske II, and Hakan Salt, receive no compensation to write about any specific stock, sector, style, or theme.
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[1] The Risk-Free Rate is based on the 3-month T-bill.