The 'Magnificent 7' Propel Mutual Funds to a Robust Opening in 2024, Says Goldman Sachs

At the dawn of 2024, a selection of exceptional stocks known colloquially as the 'Magnificent 7' have significantly contributed to the uptick in mutual fund performances, as observed by analysts at Goldman Sachs. This surge marks a notable recovery from the previous year's underwhelming showings.

The Rise of Large-Cap Mutual Funds

Goldman Sachs reports a promising trend in the mutual fund market with 46% of large-cap mutual funds outshining their benchmarks since the beginning of the year. This figure surpasses the usual 38% rate of outperformance that has been previously recorded. Analysts highlight that both growth and value funds are reflecting a similar pattern of success, with 55% and 53% respectively, surpassing their benchmarks.

Small-Cap Funds Take the Lead

The real standouts, however, are the small-cap funds, where an impressive 80% have triumphed over their year-to-date benchmarks. Moreover, the average fund is cruising ahead by more than 100 basis points when measured against the norm.

Stock Selection Fuels Success

Portfolio managers have leveraged sharp stock-picking abilities to benefit from the broad range of returns offered by the 'Magnificent 7'. Despite the group's overall strong performance year-to-date, individual underperformers within this elite circle, such as Apple and Tesla, paradoxically provided a lift to mutual funds by beating common benchmarks. This advantage has helped to balance the impact of price surges seen in other major players like NVIDIA and Meta Platforms.

mutual-funds, performance, stocks