Active equity managers mostly outperformed in Q2

Global active equity managers took advantage of the second quarter rebound, with many outperforming their benchmarks. According to data reported to eVestment, an average 63% of the managers observed outperformed their respective indexes during the second quarter. EAFE equity strategies had the most success over the three-month period, with 73% performing ahead of the MSCI EAFE index. U.S. equity funds had the lowest rate of outperformance at 53.7%, on par with the success rate for the first half of the year.

U.S. equity managers were facing an uphill battle for relative returns in the second quarter as the equity class was up an average 23% vs. the broad U.S. equity market's 21.5% surge (Russell 3000 index), leaving little room for separation. The group did, however, outperform its peers in absolute terms, 2 percentage points ahead of the next-best performer, emerging markets.

The growth vs. value story has been one of note this year as growth has left value in the dust powered by tech mega caps. But active value managers have had a strong showing in relative returns. About 67% of large-cap value equity strategies topped the Russell 1000 Value index in the second quarter, compared with only 44.6% of large-cap growth managers finishing ahead of the comparable growth index. Outperformance rates for small-cap managers were more narrowly separated.