Growth Spurt for Active Managers

US growth stocks surged in the first half of 2017, fueled by mega-cap technology companies. Active managers of growth portfolios have done especially well, reinforcing the case for stock-picking strategies.

Last year was tough for investors in US growth stocks. Only 6% of active managers in large-cap growth equities beat their benchmarks during 2016—the worst year on record. But this year’s rebound has been swift, with more than 70% of active growth managers outperforming their benchmarks in large-, medium- and small-cap stocks through May, according to Morningstar data.

Market conditions today warrant an active approach, in our view. . In this type of market, we believe careful stockpicking driven by fundamental research is the best way to avoid risky parts of the market and deliver solid long-term returns.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.