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iShares S&P 500 Value Index (ETF) (AMEX:IVE)
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No true S&P Index mutual funds nor S&P Index ETFs can actually beat the S&P 500 itself.
The S&P 500 index is a calculation based on price and value of 500 stocks.
The funds that attempt to emulate the index cannot outperform the index itself because it has to incurr other costs, like commission and fees.
I should be possible for this "value" index to outperform the S&P 500 because it is not tracking the entire S&P 500. Therefore if the part of the S&P 500 that this index considers to be "value" stocks outperforms the rest of the S&P 500 this index will outperform. If it were impossible I doubt someone as good at caps as "everydayinvestor" would have chosen outperform on it.
Although I agree with you that everydayinvestor has quite an impressive record, anyone can make an error. I would have to agree with Bcc207 in that - in the real world - a value index just plain shouldn't be able to outperform the index it is supposed to copy. It would be just a stroke of luck for the index manager to only choose those stocks in the SP500 that go up and neglect those that drop or stay down. However, it shouldn't neccessarily underperform much either, which is exactly why (for CAPS purposes) I would never choose them - no bang for your buck, so to speak. In my real portfolio, I may choose them since the market overall seems to go up over long periods of time.
In this instance, IVE has actually underperformed the SP500 by a bit in the last year or so, which makes one think that it might bounce back a bit at some time or another, but I wouldn't think it will pass the index it is based upon.