Investing.com -- Bank of America reported that 53% of large cap active funds outperformed their Russell benchmarks in June, though the first half hit rate stood at 38%, matching the long-term annual average of 37% but up from 29% in 2025.

Growth funds performed best in the first half, with 57% outperforming compared to 25% of Core funds and 18% of Value funds. Value funds faced a higher benchmark hurdle, with the Russell 1000 Value gaining 16% versus the Russell 1000 Growth's 5% increase.

Value funds were hurt by insufficient exposure to semiconductor and hardware stocks that drove returns. Five stocks, Micron Technology (NASDAQ: MU), Intel (NASDAQ: INTC), SanDisk, Applied Materials (NASDAQ: AMAT), and Advanced Micro Devices (NASDAQ: AMD), contributed 7 percentage points to the benchmark's first half return. All were underweighted by Value funds tracked by Bank of America. All but Intel were removed from the Value benchmark in the latest rebalance.

Following what Bank of America called the largest Russell index rebalance on record, benchmarks have become more concentrated. The Russell 1000 Growth Index now contains 365 companies but has concentration equivalent to an equally weighted portfolio of just 21 stocks, with 70% composed of technology and Magnificent 7 stocks. Active portfolios have grown more concentrated alongside benchmarks since 2022.

Small and mid cap funds showed stronger performance in June. 91% of small cap funds and 71% of mid cap funds beat their respective Russell benchmarks in June, rebounding from hit rates below 20% and 30% in May. For the first half, 40% of small cap and 54% of mid cap active funds outperformed benchmarks, exceeding the 38% hit rate for large cap funds.