Shocking June Performance: Value Funds Plunge While Growth Funds Hold Steady – What This Means for Your Investments
Bank of America Report: June Fund Performance Analysis
Bank of America's latest report reveals a significant shift in global fund performance for June. Value funds experienced a median decline of 0.88% compared to their benchmarks, with only 24% outperforming. This is a noteworthy change given that, year-to-date (YTD), 52% of Value funds have managed to outperform their benchmarks, boasting a median YTD return of 0.27%.
Growth Funds: Better, But Not Great
Interestingly, Growth funds fared slightly better in June. Nearly half (49%) of these funds outperformed their benchmarks, achieving a median relative return of -0.04%. However, the YTD performance tells a different story, with only 40% of Growth funds surpassing their benchmarks and a median YTD relative return of -0.84%.
Key Stock Picks: Triple Momentum Winners
Bank of America's report also shines a spotlight on intriguing stock picks within each fund category. They identify companies exhibiting strong "Triple Momentum" (positive momentum in earnings, price, and news sentiment). Growth funds show a preference for stocks like NU, Icon (NASDAQ: ICUI), On Holding, and TSMC. On the other hand, Value funds are heavily invested in BJ's Club, US Foods, Ameriprise Financial (NYSE: AMP), and Hana Financial.
Aggressive Funds: A Struggle to Keep Up
The report concludes with a look at the performance of aggressive funds—those with a very high Active Share Ratio. These funds underperformed the market by a median of 2.72% YTD and 0.62% in June alone. Conversely, funds that closely follow their benchmarks have shown better performance YTD.
Breaking It Down: What This Means for You
For the Average Investor
To put it simply, if you have investments in Value funds, you've likely seen a dip in June but might still be ahead for the year. Growth funds have been more stable in June but haven't performed as well over the year. If you're invested in aggressive funds, be aware that they have struggled significantly compared to more conservative, benchmark-following funds.
Actionable Insights
- Reassess Your Portfolio: Given the current market performance, it might be wise to evaluate the balance between Value and Growth funds in your portfolio.
- Consider Triple Momentum Stocks: Look at the stocks identified with strong Triple Momentum, such as NU and BJ's Club, which are favored by successful funds.
- Think Twice About Aggressive Funds: If your portfolio includes aggressive funds, you might want to reconsider, as their performance has lagged behind more benchmark-aligned options.
Understanding these shifts can help you make more informed decisions about where to allocate your investments, potentially maximizing your returns while minimizing risks.
By keeping a close eye on fund performance and market trends, you can better navigate the complexities of investing, ensuring your financial health and growth.