Key insights
- Bank of America reports only 43% of global active funds beat benchmarks in April, with value and high active share funds underperforming significantly. High active share funds are underweight mega-cap US tech stocks like AAPL, NVDA, MSFT, and META, suggesting potential headwinds for these names if active managers continue to reduce exposure.
Investing.com -- Only 43% of active funds globally outperformed their respective benchmarks in April, with a median relative return of -0.43%, according to Bank of America. Global equities rebounded 10.0% during the month, with significant rotation to high-risk stocks.
Growth funds performed best globally, with 48% outperforming and a median return of -0.09%. Value funds experienced their third-worst month in 13 years, with only 28% outperforming and a median return of -1.56%. Yield funds saw 25% outperform with a median of -1.80%, while high Active Share Ratio funds in the 80-100 range had 30% outperform with a median of -1.78%.
By region, Asia Pacific ex-Japan funds performed best in April, with 55% outperforming benchmarks by a median of +0.17%. These funds are most overweight Taiwan and Korea while underweight Australia.
Asia Pacific ex-Japan funds' largest overweight positions include ICICI Bank, AIA, HDFC Bank, MediaTek, Eternal, State Bank of India, and Midea Group. The largest underweights are TSMC, Reliance Industries, Tencent, Alibaba, Xiaomi, Bank of China, and CBA.
High Active Share Ratio funds in the 80-100 range hold largest overweight positions in AIA, HDFC Bank, Edenred, Techtronic, Kinsale, Bank Central Asia, and RBC Bearings. The largest underweights are Apple (NASDAQ: AAPL), NVIDIA (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), Tesla (NASDAQ: TSLA), Amazon (NASDAQ: AMZN), Broadcom (NASDAQ: AVGO), Alphabet, HSBC plc, Meta (NASDAQ: META), and Berkshire Hathaway.