Active global and US funds posted their best performance against comparable index trackers in the first half of the year, but UK funds did less well, according to the latest AJ Bell Manager versus Machine report.

Long-term the picture wasn’t so rosy for active funds, with just 30% of them beating a comparable index tracker over the last 10 years.

Weak mid and small cap performance may be a headwind for the long-term performance of active managers for years to come, AJ Bell warned.

Laith Khalaf, head of investment analysis at AJ Bell, said: “It looks like Donald Trump has done what years of toil and sweat have failed to achieve, namely some measure of outperformance from global active funds.

“In the first half of 2025, 51% of active funds in the global sector outperformed a passive alternative. This is the first time since we launched the Manager versus Machine report in 2021 that global active managers have registered anywhere near a win rate above 50% against the passive machines, on any of the time frames we look at.”

The Manager versus Machine report analyses more than 1,000 funds across seven key Investment Association sectors.

Mr Khalaf said: “The previous high water mark for global active fund managers to hang their rather battered hats on came in December 2021, when 40% of them beat a passive alternative over a five year period.”

Sources: AJ Bell, Morningstar total return in GBP to 30 June

Mr Khalaf said: “Active management in the global and US sectors may have perked up in 2025, but it’s been a dismal year so far for active managers investing in the UK stock market, where only 29% managed to beat the average index tracker.

“This poor performance can largely be laid at the door of mid and small caps lagging behind the big blue chips of the FTSE 100, combined with the fact active managers tend to be underweight large caps compared to a plain vanilla index tracking fund.”

He reported that over the last ten years, just 30% of active funds across all seven equity sectors in the company’s analysis have outperformed a passive alternative.

He said: “This is the worst ten year reading we have seen since we started compiling Manager versus Machine in 2021. Conditions over the last decade have been bleak in these sectors for active managers, with only 31% outperforming in the UK, 17% in the global sector and 15% in the US.”