Jun. 14--Investors who have been ignoring their monthly statements since the bear-market lows of March might be surprised to learn they could be in positive territory, year-to-date. The Bloomberg-Star Tribune 100 index of Minnesota's largest public companies is up about 10 percent so far this year versus about 6 percent for the Standard & Poor's 500 index, including dividends.

Still, the indexes feel better than they really are. That's because the Strib 100 and S&P 500 are up more than 30 percent from their March lows.

Why are Minnesota stocks outperforming their bigger bretheren, such as the S&P 500?

"Small-cap stocks normally do [better] in market rallies," said Keith Tufte of Longview Asset Management. "They are riskier and ... they go up more in bull markets and down more in bear markets normally. This rally is no exception."

The Minnesota rally is led by the likes of Navarre Corp., outdoors retailer Gander Mountain, TV shopping channel ValueVision and Caribou Coffee, up 100 to 300 percent this year. Does that mean long-term shareholders are making out? Not necessarily. Generally, these stocks have been declining for several years owing to flawed business plans, flawed leadership or poor execution.

Take Navarre, a digital-entertainment company. It's up about 125 percent this year. But the stock trades around $1.50 per share. In January 2005, the stock traded above $19 per share.

Then there's Caribou Coffee, which went public around $10 in 2005. It's up more than 300 percent this year. But that only gets you to around $6.60 per share. Lower than 2005. To be sure, new CEO Michael Tattersfield appears to have a clue, although it's tough going, with a Starbucks and an independent competitor on every block.

Russell Investments just completed a study that suggests small-cap stocks tend to do worse in a recession. When investors get spooked, as they were when the market fell by half between October 2007 and March 2009, they run for safety toward government bonds and sound stocks that weather recessions pretty well. Those companies include the larger likes of General Mills and utility companies such as Xcel Energy. Those drop less during market falls and rise less during upswings.

Some household-name technology, retail and financial stocks are up by nearly 50 percent since the first-quarter plunge. For example, banking giants U.S. Bancorp and Wells Fargo & Co. have bounced solidly off their March lows, though they remain below their January highs.