While growth reigned supreme and value struggled in 2020, their fortunes have reversed so far this year. Since Dec. 31, the Russell 3000 Growth index is down 6.3% through May 26, while the Russell 3000 Value index is up 18.2%.
Managers that offered outcome-oriented solutions also fared well last year. Managers of liability-driven investment strategies that P&I tracked managed $3.82 trillion in global assets as of Dec. 31, up 13.9% from the year before. Meanwhile, the 25 largest outsourced CIO managers ran $2.07 trillion in OCIO strategies, up 11.2%.
The 25 largest managers of non-affiliated insurance company assets had $3.22 trillion in AUM, up 10.3%.
"Firms with capabilities that allowed them to bring outcome-oriented solutions to clients, be it OCIO, LDI, or insurance outsourcing, did quite well," Casey Quirk's Mr. Levi said. "On the flip side, factor investing struggled quite a bit after having some early success."
Factor investing was flat, according to P&I data. The top 25 managers of factor-based strategies had $1.86 trillion in assets, down 0.3% from the year before.
"Factor investing historically underperformed strong active," Mr. Levi said. "In a strong rising market, (investors) often want to take more risk, so they take stronger active to get returns they want."
While factor investing struggled, passive investing, particularly domestic investing, continued to see strong growth. The largest managers of U.S. institutional tax-exempt assets managed internally saw passive domestic equity assets reach $3.43 trillion as of Dec. 31, up 14.9% over the previous 12 months and up 88.9% over the previous five years. Passive domestic fixed-income assets, meanwhile, grew to $1.04 trillion as of Dec. 31, up 17.5% for the year and up 101.8% over five years.
It was a different story for passive non-U.S. assets. Passive non-U.S. equity assets fell to $549.5 billion as of Dec. 31, down 15.1% from the year before but up 29.1% from five years earlier. Enhanced index non-U.S. equity assets were $9.03 billion, down 59.2% for the year and down 59.4% for the five years ended Dec. 31. Passive global/non-U.S. fixed income reached $16.8 billion, down 30.6% for the year and down 24.2% for five years.
By comparison, active domestic equity assets among the managers of U.S. institutional tax-exempt assets managed internally increased 12.4% to $2.91 trillion for the year ended Dec. 31 and 26.5% for the five-year period. Active domestic fixed-income assets, meanwhile, grew to $3.63 trillion, up 8.9% for the year and up 23.8% for the five years ended Dec. 31.