Surprise! The Year's Top-Performing Industry

What's the top-performing industry so far this year in the stock market? Nope, it's not discount stores or gold miners (although both are high on the list). Title insurers occupy the top spot, with a 21 percent gain through March 20, according to Morningstar. For those not familiar with the business, title insurance is designed to protect property buyers against liens and other defects to ensure clear ownership.

So what gives? I put the question to Morningstar analyst Jim Ryan, who says title insurance is a misunderstood industry that's often lumped together with mortgage and bond insurance (the six stocks that make up that Morningstar category are down a collective 21 percent over the past year). "People are starting to figure out that a number of things don't affect [title insurers] that affect other companies," Ryan says. "They're really nothing like mortgage insurance or bond insurance. These are very well-capitalized companies with huge reserves that can wait out bad times. What really drives them is the volume of [real estate] transactions."

He adds that title insurers—including Fidelity National Financial and LandAmerica Financial Group—got an extra boost this week when regulators loosened restrictions on the amount of mortgages the government-sponsored Fannie Mae and Freddie Mac can hold on their books. "That just means more transactions for the title companies," Ryan says.