SUMMARY
Following an initial steep drop and recovery at the onset of the COVID-19 pandemic, equity markets around the world continued their rebound in 2021 as the global economy began to re-open. The S&P 500® had recovered all of its COVID-19-related losses by August 2020, and it posted a 40.8% gain over the 12 months ending on June 30, 2021. Of the 31 distinct benchmarks tracked by this report, 27 finished with a positive return over the year; the exceptions were among longer-term fixed income indices.
The positive market performance broadly translated into good absolute returns for active fund managers. But relative returns continued to disappoint; in 15 out of 18 categories of domestic equity funds, the majority of actively managed funds underperformed their benchmarks. The performance was particularly underwhelming in the small-cap space, as 78% of all small-cap funds lagged the S&P SmallCap 600®.
