Equity returns are significantly higher in the third year of a president’s term, according to The Presidential Term: Is the Third Year the Charm?, a study released April 18 by the CFA Institute.

Among the findings: Between 1957 and 2004, large-cap equities returns were nearly triple in year three of a president's term compared to years one, two and four. Higher returns of small-firm equities were even more pronounced, with small-cap stocks earning an average of 12.1 percent during a presidents's first year, followed by 3.4 percent, 38 percent and 20.8 percent in succeeding years.

The authors note that the jump in earnings coincided with the tendency of the Federal Reserve to be more accommodating and expansive in a president’s third year.

The study was conducted by Robert Johnson, managing director of the CFA Institute Education Department; Scott B. Beyer, assistant professor of finances at the University of Wisconsin, Oshkosh College of Business; and Gerald R. Jensen, professor of finance at Northern Illinois University College of Business. The Journal of Portfolio Management will publish the report in an upcoming issue.