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After global equity and bond markets soared in 2023, this year began on somewhat rockier ground. Valuations were more stretched, dispersion was rising and roughly half of the world’s population was facing uncertain election results. Many concluded that, among other predictions, active management was set to shine in 2024.

The performance of actively managed funds is assessed in S&P Dow Jones Indices’ regular SPIVA^® Scorecards, and the results for the first half of this year are now available in a single, global report. In two of the largest fund categories —namely global and U.S. equities—it seems that the wait for the long-promised “stock-pickers’ market” continues.

Equity markets, admittedly, did not offer easy pickings in H1 2024: a whopping 75% and 73% of S&P 500^® and S&P World Index constituents, respectively, had a lower return than the indices themselves. Active fund managers operating within those markets did not fare much better. Exhibit 1 shows the percentage of underperforming active equity funds in both categories. Although U.S.-domiciled funds came closest to changing the story, in both global and U.S. equity categories, a majority of actively managed funds underperformed.

But bond managers did have more to boast about. The winds were more in their favor, too. At the start of 2024, the U.S. and major European sovereign yield curves were inverted, meaning an intermediate-term manager could seek higher yields at typically lower risk (if measured by duration) by holding shorter-dated bonds. Further, both investment grade and high yield credit spreads compressed in H1 2024, meaning that managers taking on a little more credit risk than their benchmark could have expected to be rewarded. In many (but not all) of the largest fixed income categories, a majority of actively managed funds outperformed.

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