The question above is very simple, and it has a very simple answer. "Yes. Handloads are more accurate than factory ammo."

To prove this assertion, I decided to pit some of my handloads against some factory ammo to see which shot better groups.

I went to my local gun shop and purchased two 20-round boxes of Federal XM193 "Tactical" 5.56 ammo (it was all they had at the time), and made 20 rounds of my own .223 ammo using a load that I'd worked up previously.

I then took my handloads and the factory ammo to the range to "fight it out".

Using a Savage Model 12 rifle on a front sandbag rest, I fired four 5-shot groups from each lot of ammo at targets 100 yards away.   The results (group sizes) for the factory ammo are shown in Table 1.   The handloads are in Table 2.

The best groups from each lot of ammo are shown in Figures 1 and 2.

As you can clearly see, the results weren't even close.   The groups from the factory ammo averaged more than 4 times the size of the groups from the hand-loaded ammo.

Was This a "Fair" Test?
When I was doing the shooting for this article, one of my fellow club members was present, and he let me know (in no uncertain terms) that he thought my test was unfair.   "You made that ammo specifically for that rifle", he remarked.

"There's no way that factory stuff is going to outshoot your handloads" he said, "You're using those pricy match bullets, while the factory ammo has military-style 55 grain bullets with a cannelure.   If you want a fair test, you should get some factory match ammo."

This brief exchange highlighted three of the most important benefits of hand loading.

First, he was right about my handloads.   I did make them specifically for that rifle.   In fact, the load I used was developed through extensive testing with the very rifle I was shooting.   One of the most important benefits of hand loading is that you have the ability to try various loads in your guns and select the ones that perform the best.

He was also correct in his assertion that the match-grade 73 grain bullets in my handloads were not only better than the military-style 55gr bullets in the factory ammo, but they were better suited for the 1:7 twist rate in the barrel of my Savage rifle.   Even though match bullets are more expensive than the 'bulk' bullets likely used in the factory ammo, I was still able to make my handloads for a fraction of what I paid for the factory ammo.  Benefit Number Two is cost savings even when using superior components.

Finally, he was spot-on with his comment that this contest would have been much closer if I had compared factory match ammo to my handloads.   The fact is, I intended to do just that, but after visiting three shops, I was unable to find any match ammo, and had to settle for whatever I could get.   Benefit Number Three is availability.   It's more economical to stock up on components, and simply make the ammo you need when you need it.  

If the simple question was "Are reloads more accurate factory ammo?", and the simple answer was "Yes", then the tougher question is "Why?"   I'll try to answer that in next my article.

UPDATE:
If you're reading this because you clicked on a link from the Starline Facebook page, please be advised that their brass is OK (not as good as Jagemann), however their customer service leaves a lot to be desired.

Without my permission, they've been using my website to promote their products on Facebook.

My only business is from local (to MA) in-person reloading classes, which fill up anyway, and manufacturing "boutique" ammo for sale (I'm an 07 FFL). Their promotion really doesn't help me, it only helps them. Even so, I don't mind them doing it.

They do it a lot too. As of 8/2020 they've posted links on Facebook 14 times and counting!

Here's what bugs me: I've sent them no less than four customer inquiries, and they've ignored every single one. Every. One. I'm sure business is good right now (AUG 2020), but ghosting prospective customers is bad, and we have long memories.