Best Move of the Year So Far? Playing the Flu

Amid all the hyper-bullishness about the stock market this year, the effectiveness of the swine flu play may be getting lost.

Yes, one of the most effective strategies has been betting on shares of companies that benefit from the higher-than-expected level of influenza cases.

In fact, a proprietary index used by broker-dealer Strategas to measure the market-flu phenomenon shows that its "Swine Flu Index" basket of stocks has been the best performer for the first month of 2013. (Read More: Flu Update: Are We Near the Peak?)

"As the flu season builds, companies related to this development have been outperforming," Strategas analysts Daniel Clifton and Jeff Rubin said in a note Tuesday.

So how does one play the flu?

Timothy A. Clary | AFP | Getty Images

A man is given a flu shot by at the medical offices of Yaffe Ruden & Associates in New York.

Essentially, the index uses a slew of health care stocks interspersed with some basic consumer names - think AstraZeneca and Baxter, which manufacture your prescriptions; CVS Caremark and Wal-Mart where you buy your flu-fighting drugs;and Campbell Soup, which dispenses all that comfort-food-in-a-can that you'd eat while watching movies you rented from Netflix.

As respective groups, health care stocks have served as leadership for the Standard & Poor's 500, returning 6.85 percent as of Monday. Consumer staples have been middle-of-the-pack at 5.34 percent, while consumer discretionary have been strong at 5.8 percent.

A generally mediocre earnings season, in which companies have managed to beat vastly lowered expectations, has seen health care and staples stand out, along with technology. S&P 500 health care stocks have rung up a 65 percent earnings beat - 59 percent on top-line revenue - while staples have led the pack with a 75 percent beat rate, though only 50 percent on revenue, according to Bank of America Merrill Lynch. (Read More: Flu Season Fuels Debate Over Paid Sick Time Laws)

"Health care and energy remain the most broadly undervalued sectors on all three metrics we track," said Savita Subramanian, equity and quant strategist at BofA. "Pharma remains our preferred industry within health care, in part due to the fact that it is one of the only yield plays that still looks attractively valued."

As for the Swine Flu Index itself, it has cruised along at an 11.3 percent return, more than double the 5.2 percent the S&P 500 has delivered so far.

The flu, of course, is serious and still taking its toll. The flu mortality rate is currently at epidemic levels, according to the Centers for Disease Control, which said 47 states have reported "widespread geographic influenza activity."

The flu index is well ahead of some other measures Strategas has devised to replicate strategies depending on market phenomena and policy implications.

Second-best of the group is the Infrastructure Index, which focuses on government capital improvements and has returned 8.4 percent in 2013. Others include the MIddle-Class Tax Cut Index, as well as the Repatriation Index and the Stop Gun Violence Index.

The worst performer of the group? As you might have guessed it's the Fiscal Cliff Long Index (up 4.2 percent), underperforming the market as Congress has dodged - for now - ramifications of mandatory spending cuts and tax increases.