Bank of America reported a turnaround in global fund performance for June, with value funds seeing an average decline of 0.88% relative to their benchmarks. Only 24% of value funds managed to outperform their benchmarks in June.
Despite the decline, Bank of America acknowledged that value funds still have an advantage year-to-date, with 52% of them outperforming their benchmarks. The average return year-to-date for value funds outperforming is 0.27%.
By contrast, Bank of America says growth funds have weathered June’s market moves a little better. Nearly half (49%) of growth funds have outperformed their benchmarks, with an average relative return of -0.04%. Growth funds have underperformed so far this year, however, with only 40% beating their benchmarks and an average relative return of -0.84% so far this year.
The Bank of America report also highlights interesting stock picks within each fund category. The report identifies companies with strong “triple momentum” (positive momentum in earnings, price and news sentiment) that are heavily weighted in the respective funds. Growth funds favor NU, Icon (NASDAQ:) plc, On Holding and TSMC, while value funds lean toward BJ’s Club, US Foods, Ameriprise Financial (NYSE:) and Hana Financial.
The report concludes by pointing out the difficulties faced by aggressive funds, those with a very high percentage of active stocks. These funds are said to have underperformed the market by an average of 2.72% year-to-date and 0.62% in June alone. Conversely, funds that closely track the benchmark have performed better year-to-date.
