In an investment landscape dominated by market-cap-weighted benchmarks like the S&P 500, the Barron’s 400 ETF (BFOR ) offers a different path.
BFOR tracks an equally weighted index of 400 companies in the United States, selected based on a Growth at a Reasonable Price methodology also known as GARP. This rules-based approach favors firms that score well on a range of fundamental indicators (earnings growth, profitability, and valuation). The methodology excludes Real Estate Investment Trusts (REITs).
Unlike many traditional funds, BFOR’s index methodology doesn’t allow a handful of mega-cap tech stocks to dominate performance. Each holding makes up roughly 0.25% of the fund upon rebalancing, meaning every company, from Microsoft to the much smaller NewtekOne Inc, has an equal chance to influence returns.
A GARP-Focused, Equally Weighted Portfolio
GARP investing seeks a balance between value and growth. BFOR’s methodology helps filter for companies that are growing efficiently and at reasonable valuations. The semi-annual rebalancing ensures the portfolio stays aligned with these criteria, offering investors a dynamic and responsive strategy.
BFOR’s expense ratio of 0.65% is modest given its rules-based methodology that incorporates a wide range of data. This approach has delivered solid historical performance. According to YCharts, BFOR returned 11.48% over the last 12 months and 122.4% over the last five years. Year-to-date, as of the latest data, it’s up 1.68%.
Diversification by Design
BFOR’s structure promotes balanced sector exposure by capping any single sector at 20%, or around 80 companies. In its most recent rebalance (March 31, 2025), 182 companies were replaced, with technology seeing the largest increase and energy experiencing the most significant drop.
This adaptability makes the fund a compelling core holding for investors looking to avoid overconcentration. Additionally, it could appeal to those comfortable with a tilt toward smaller and mid-sized companies — an area often overlooked in traditional large-cap benchmarks.
That said, the equal-weighted and sector-capped structure can result in higher volatility, particularly with that tilt toward smaller companies and more concentrated sector exposures. For investors, this means BFOR may perform differently from broad market benchmarks in the short term. However, it may have a more robust performance across full market cycles.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
