For the year ended March 31, the median return for growth strategies was -7.42% in Morningstar's universe, while value strategies returned -18.14%. The Russell 3000 Growth index returned -1.62% for the year ended March 31, while the Russell 3000 Value index returned -20.18%.
Additionally, Mr. Thomas said, "I think you could say the technological developments that have so excited people — let's take e-commerce for example – have been amplified (by the sell-off)."
He added, "It has really exacerbated some of the trends that have been in place."
The overall median return for domestic equities within the Morningstar separate account universe was -12.28% for the year ended March 31, compared to the Russell 3000 index return of -10.84%.
Despite growth making up the majority of the top 10 strategies for the year ended March 31, the top manager was in Morningstar's tactical allocation category.
First National Corp., Rockland, Mass., ranked first and third with the Chapaquoit Dynamic Aggressive and Chapaquoit Dynamic Moderate strategies, which had gross returns of 17.48% and 14.58%, respectively, for the year ended March 31.
The strategies are two of three Chapaquoit dynamic portfolios managed by Philip G. Nehro and Richard E. Oberuc, both investment adviser representatives at First National Corp. Mr. Nehro said in a telephone interview that the strategies were born in the early 2000s when they saw market volatility was increasing and tactical asset allocation was the way to deal with it.
"Chapaquoit is a quantitative artificial intelligence investment model," Mr. Oberuc said in a telephone interview. "It's completely quantitative and we have no discretionary input into the model. We don't argue with what it says."
Mr. Oberuc said the difference between what the Chapaquoit strategies do and what other quantitative managers do is the employment of macroeconomic and market factors as big data.
"We use that to control changes in asset allocations," Mr. Oberuc said. "The model is formulated as an advanced linear programming framework.
The goal of the model is to target an acceptable rate of return over a market cycle of six to eight years, and the objective function is to minimize the total months the portfolios see any losses, Mr. Oberuc said.
The three Chapaquoit dynamic portfolios — which also includes a conservative strategy — each have a different target rate of return.
"Each strategy will then wind up with a different sum of portfolio losses, so it's a true downside risk approach," Mr. Oberuc said.
When the S&P 500 is down, he added, the aggressive portfolio only loses about 24% of whatever the S&P 500 loses.
"That's why we sailed through the numbers for the last year so well," he said.
Ranked second was the active tax U.S. all cap strategy managed by Advisor Partners LLC, Walnut Creek, Calif., which returned a gross 14.58% for the year ended March 31.
Advisor Partners primarily works with financial advisers for high-net-worth clients, according to the strategy's Morningstar comprehensive report, but institutions can hire the firm for separate account strategies.
The strategy seeks to match the risk and return characteristics of the S&P 500 and "illustrates how tax-loss harvesting techniques can improve after-tax returns," the report said.
The strategy consists of a subset of portfolios from the firm's U.S. All Cap Core strategy that have been managed for fewer than four years, when tax-loss harvesting opportunities are generally available, the report said.
As of March 31, the strategy contained 289 equity holdings, according to the Morningstar report. The top five holdings, making up 20.6% of the total portfolio, were — in order — Microsoft Corp., Apple Inc., Amazon.com Inc., Berkshire Hathaway Inc. and Facebook Inc.
Officials at Advisor Partners did not reply to requests for further information.
Ranked fourth was Night Owl Capital Management LLC, Greenwich, Conn.
The manager's All Cap strategy returned a gross 11.82% for the year ended March 31.
Eileen Ohnell, Night Owl Capital's president, said in an email that the firm's philosophy is to "deliver strong absolute returns for our clients while mitigating risks of both volatility and loss of capital."
The manager's portfolios are concentrated, with 20 to 25 positions, and an average holding period of more than five years.
"Our aim is to generate strong, consistent absolute returns and outperform the S&P 500 over a three-to-five-year time horizon with materially lower risk," Ms. Ohnell said of the All Cap strategy. "We do this by investing in companies with highly visible long-term earnings growth that are run by managers who consistently act like owners of the business while maintaining our discipline on valuation."
Among the secular growth themes embraced by the strategy are "software 'eating the world,' payments becoming more digital, and server loads moving to the cloud." The best performers over the past year include Microsoft, Okta Inc., RingCentral and Shopify Inc.
Zevenbergen Capital Investments LLC's growth equity strategy was ranked fifth for the year ended March 31, with a gross return of 11.48%.
Joseph Dennison, portfolio manager for the Seattle-based firm, said in a telephone interview the strategy is a high-conviction, high-growth, all-cap strategy.
It has a "singular focus on concentrated portfolios that we feel are shaping the future," he said.
"We invest in leading companies or products operating in very large, rapidly growing markets," he said. The strategy has benefited specifically from businesses involved in the digital transformation of industries, and because of its concentrated portfolio benefits more from stock selection than macroeconomic or market factors, he added.
Holdings that have driven outperformance for the year ended March 31 include Teledoc Health Inc. Mr. Dennison said the telemedicine and virtual health company, which has already had strong performance, has benefited particularly from the current crisis, which has driven up demand for remote health-care services.
"This is driving a lot of awareness, new trials and new adoptions for the product," Mr. Dennison said.
Other holdings that have driven performance are Shopify and Tesla Inc., Mr. Dennison said.
The rest of the top 10 strategies for the year ended March 31 were: Leading Edge Investment Advisors LLC, which saw its CBI strategy return a gross 9.89%; Peregrine Capital Management LLC's large-cap growth strategy, 9.72%; Dana Investment Advisors Inc.'s unconstrained fundamental equity strategy, 9.1%; Baron Capital Management Inc.'s high growth strategy, 8.92%; and Westfield Capital Management Co. LP's select growth equity strategy, 8.5%.
Gary Nussbaum, Minneapolis-based principal and portfolio manager at Peregrine, said in a phone interview that holdings in technology and health care including Adobe Inc., Teledoc Health Inc. and Tyler Technologies Inc., were primary drivers of the outperformance in its large-cap growth strategy over the past year.
David Weinstein, Waukesha, Wis.-based portfolio manager with Dana Investment Advisors, said much of its outperformance occurred in the first quarter of the year. Its unconstrained fundamental equity strategy has benefited from its recognition of some of the changes that have been happening in the economy.
Winners in the strategy include Facebook, Netflix Inc. and SalesForce Inc.
For the five years ended March 31, ARK Investment Management LLC's ARK Next Generation Internet strategy led the list for a third consecutive quarter with an annualized gross return of 24.32%.
The strategy falls within Morningstar's technology category, one of five such strategies within the top 10 for the five years ended March 31. The other five strategies were all growth strategies.
The rest of the top five were: Azzad Asset Management Inc.'s small cap growth strategy, which returned an annualized gross 19.02% for the five years ended March 31; Granahan Investment Management Inc.'s small cap focused growth strategy, which returned an annualized gross 17.9%; Zevenbergen's Genea growth strategy, 17.72%; and J.P. Morgan Asset Management's U.S. technology leaders strategy, 17.6%.
The median five-year annualized return for domestic growth strategies in Morningstar's domestic equity separate account universe was 6.44%, and the median among all domestic equity strategies was 3.2%. The Russell 3000 index returned an annualized 3.73% for the five years ended March 31.