What You Need to Know
- Nearly 70% outperformed their Russell 1000 benchmark, according to Bank of America Securities.
- But just 53% of active large-cap funds beat the S&P 500 in May.
- Analyst Todd Rosenbluth doesn’t expect the data will influence the many investors who favor passive large-cap ETFs.
Actively managed large-cap mutual funds had one of their best-performing months ever this May, with nearly 70% outperforming their Russell 1000 benchmark, according to Bank of America Securities.
That’s far more than the 54% of individual stocks that outperformed the index that month. Year-to-date, 62% of actively managed large-cap funds are ahead of their benchmarks, according to BofA.
Core large-cap funds were among the strongest performers in May — 79% outperformed the benchmark — followed by value funds (71%) and growth funds (60%). The BofA Securities data is based on 1,498 large-cap funds.
Quantitative active funds posted even better numbers. BofA Securities also reported that 80% of quantitatively focused active funds beat the performance of the Russell 1000 index in May and year-to-date. The reason: their tilt toward value stocks, which has outperformed growth for most months this year, including May.
When its analysts compared the performance of active large-cap funds to the S&P 500, the picture changed. Just 53% of actively managed large-cap funds beat the S&P 500 in May, and 48% beat the index year-to-date.