- 53% of large-cap active funds beat benchmarks in June, with 91% of small-cap and 71% of mid-cap funds also outperforming, according to Bank of America.
- Growth funds led in the first half of 2026, driven by technology gains, while value funds lagged due to lower semiconductor exposure.
- The data signals a broadening of active management performance, favoring stock-pickers in a more dispersed market.
Active fund managers enjoyed a strong June, with more than half of large-cap funds beating their benchmarks, Bank of America Global Research reported. The outperformance was even more pronounced among smaller companies: 91% of small-cap funds and 71% of mid-cap funds topped their respective indices.
Growth funds have been the standout category in the first half of 2026, buoyed by robust gains in technology stocks, particularly semiconductors. In contrast, value funds have underperformed, largely due to their limited exposure to the chip sector, which has surged amid AI-driven demand.
"This is a stock-picker's market," said one fund manager, speaking on condition of anonymity. "The breadth of outperformance suggests that skilled managers are finding opportunities beyond the mega-cap names."
Bank of America's data highlights a shift in market dynamics: after years of passive investing dominance, active funds are capitalizing on greater dispersion among stocks. The trend is particularly encouraging for small-cap managers, who have historically struggled to justify their fees relative to low-cost index funds.
"The first half of 2026 has been a vindication for active management, especially for those with a growth tilt," the manager added. "But the second half could bring new challenges if the market rotates."
Attempts to reach Bank of America for additional comment were unsuccessful.