The U.S. stock market may be one of the most informationally efficient in the world—but that doesn’t mean prices are predictable. In the short term, stock movements often reflect sentiment, capital flows, or narratives. But over time, fundamentals prevail. In fact, both short-term unpredictability and long-term efficiency are two sides of the same market coin.

This dynamic creates an opportunity: by systematically identifying companies with strong fundamentals—and ignoring short-term noise—investors can capture the market’s long-term return potential more effectively.

That’s the premise behind the MarketGrader U.S. Large Cap Core Index.

A Smarter Way to Harness U.S. Large Cap Equity

Built on our proprietary GARP + Quality stock rating methodology, the MarketGrader U.S. Large Cap Core Index seeks to deliver:

• U.S. market beta through exposure to large cap equities
  
• Consistent alpha through disciplined selection of companies with superior financial health and capital efficiency
  

Rather than relying on market capitalization alone, the index selects companies that demonstrate sustainable growth, sound valuations, strong profitability, and healthy cash flow generation—all summarized in MarketGrader’s comprehensive stock grade.

How It Works

• Universe: U.S. stocks that fall within the large cap segment (approx. top 85% of total market cap)
  
• Screening: Eliminate companies with weak fundamentals (grades below 50/100)
  
• Selection: Choose the top 100 companies based on MarketGrader’s GARP + Quality composite score
  
• Rebalancing: Conducted semiannually to maintain a current and disciplined portfolio
  

This process results in a concentrated portfolio of 100 high-conviction names—those best positioned to outperform over full market cycles.

Why It Matters

Traditional large cap benchmarks may be broad, but they’re blind to fundamentals. By contrast, the MarketGrader U.S. Large Cap Core Index offers a targeted, fundamentals-first alternative for investors seeking:

• Core U.S. equity exposure
  
• Higher quality companies
  
• A rules-based strategy designed to generate long-term alpha

Conclusion

In an efficient—but noisy—market, quality is the signal. The MarketGrader U.S. Large Cap Core Index isolates that signal, delivering an index that reflects the best of American large cap equity.