Investing.com — Growth-oriented equity funds are increasingly concentrating bets in names showing strong earnings, price, and news momentum, according to Bank of America’s latest Global Fund Performance Monitor.
BofA highlighted that “Growth funds’ largest overweight positions with a high Triple Momentum Rank (top quintile by earnings, price, and news momentum) include Makemytrip (NASDAQ:MMYT), AIA, HDFC Bank, SK Hynix, and Genus (LON:GNS).”
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The firm’s “Triple Momentum” framework is said to identify stocks that score in the top quintile across all three metrics.
On the flip side, some of Growth funds’ largest overweights are in names lacking momentum, including Icon (NASDAQ:ICLR) Plc, Intermediate Capital, Clean Harbors (NYSE:CLH), and Azelis, BofA said.
Value funds are also showing clear preferences, according to the bank.
“Value funds’ largest overweight positions with a high Triple Momentum Rank include Capital One (NYSE:COF), US Foods, FirstCash (NASDAQ:FCFS), Popular Inc (NASDAQ:BPOP), and Markel (NYSE:MKL),” said BofA.
However, negative momentum names such as Installed Building, Sysco (NYSE:SYY), ConocoPhillips (NYSE:COP), Lazard (NYSE:LAZ), and IAC still feature among top holdings.
Despite a 4.4% rally in global equities during June, active fund managers struggled to beat their benchmarks.
“46% of Active Funds globally outperformed benchmark with a median relative return of -0.09%,” BofA wrote. Growth and Value funds fared similarly, with 46% and 45% outperforming, respectively, while Yield funds underperformed with only 37% beating benchmarks.
By region, Japan stood out, with “61% of Japan funds outperforming (+0.40%),” while Asia Pacific ex-Japan lagged, with just 38% outperforming and a negative median relative return.
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