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Magnificent 7 helps push mutual funds to a strong start in 2024 - Goldman Sachs

AuthorSam Boughedda
Published 23/02/2024, 13:50
© Reuters.
US2000
0.31%
AAPL
-0.01%
NVDA
-2.81%
TSLA
-1.88%
META
-0.72%

The strength of the "Magnificent 7" stocks has driven strong mutual fund performance at the start of 2024, Goldman Sachs analysts said in a note this week.

The bank explained that following a lackluster 2023, mutual funds are off to a strong start in 2024, with 46% of large-cap mutual funds beating their respective benchmarks year-to-date (YTD), higher than the typical 38% hit rate of outperformance.

"A majority of growth (55%) and value (53%) funds have outperformed their benchmarks," explained Goldman Sachs. "Small-cap funds have performed especially well: 80% have beaten the Russell 2000 YTD with the average fund over 100 bp ahead of the benchmark."

"Effective stock selection has allowed PMs to capitalize on a wide dispersion of returns within the Magnificent 7," analysts added. "While the Magnificent 7 as a group have outperformed YTD, AAPL and TSLA's underperformance provided a boost to fund performance versus benchmarks, offsetting the drag from rallies in NVDA and META."

Goldman Sachs also notes that while the Magnificent 7 as a group has outperformed YTD, Apple's (NASDAQ:AAPL) and Tesla's (NASDAQ:TSLA) underperformance provided a boost to fund performance versus benchmarks, offsetting the drag from rallies in NVIDIA (NASDAQ:NVDA) and Meta Platforms (NASDAQ:META).

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