选择主动管理型基金的投资者通常需要支付比跟踪In 2024, actively managed Large Cap Funds have once again been left behind by the Index. Can the stock-picking skills of renowned fund managers break through the monopoly of "Technology giants"?
According to a report by Bank of America Global Research, in 2024, large cap funds managed by professional stock pickers were once again outperformed by passive tracking indices of US large cap stocks.
In 2024, only 36% of actively managed USA large cap stocksMutual fundshad returns that exceeded their standard benchmark—e-min Russell 1000 Indexthis "hit rate" is the lowest level since 2020. Nevertheless, this proportion still aligns with the multi-year average level since 2003. Bank of America's strategist stated in a research report on Tuesday that 2024 is another "brilliant year" for the benchmark index. For active managers, they believe that "index concentration and narrow market breadth remain pain points."
Investors choosing actively managed funds typically need to pay more than those trackingindex fundsHigher fees mean that despite the historically underwhelming performance of USA Large Cap fund managers compared to their passive benchmarks, investors still need to pay higher fees.
The Russell 1000 Index includes the largest companies in the USA, with a significant proportion represented by giant technology companies. Last year, the substantial gains in a small number of tech giants’ stocks propelled the rise of this index.
As of January 6, the top five Hold Positions in the iShares fund tracking the Russell 1000 Index are Apple (AAPL.O), NVIDIA (NVDA.O), Microsoft (MSFT.O), Amazon (AMZN.O), and Meta Platforms (META.O). In 2024, the total return of the Russell 1000 Index increased by 24.5%, and the index has risen by 0.6% so far this January.
Investors are watching to see if more stocks will join this year to help sustain the bull market into 2025.
In another report on December 30, Bank of America's strategist Subramanian stated: "Large-cap technology stocks are currently expensive and highly competitive." She also pointed out that if interest rates remain high, "large value stocks will be the best hedge against interest rate risks," and added that value stocks are still in a "historically cheap" state compared to growth stocks.
Meanwhile, the main stock benchmark indices in the USA faced pressure on Tuesday due to rising interest rates in the Bonds market. The S&P 500 Index dropped by 1.1%, the tech-heavy Nasdaq Composite Index fell by 1.9%, and the Dow Jones Industrial Average declined by 0.4%.
In the Bonds market, the yield on the 10-year US Treasury bond rose to 4.684% on Tuesday, reaching the highest level since April 25.
Due to rising interest rates, Large Cap growth stocks have underperformed compared to value stocks. The Russell 1000 Growth Index, dominated by technology giants, fell by 1.9%, while the Russell 1000 Value Index only decreased by 0.1%.
Analysis by Bank of America found that in 2024, although most actively managed 'Large Growth' Funds failed to outperform their benchmarks, 'Value' Funds performed notably well. About 66% of actively managed Large Cap value stock funds outperformed their benchmarks in 2024, while actively managed 'Core' and 'Growth' funds struggled.
Last year, the total return of the Russell 1000 Growth Index rose by 33.4%, far exceeding the Russell 1000 Value Index's return of 14.4%. Among actively managed Large Cap growth funds, only 26% surpassed the benchmark, while Large Cap value funds had a 'hit rate' of 66%.
