While most investors likely didn’t enjoy their results from the first half of 2022, the tumultuous markets provided active fund managers with a chance to outperform, according to research from S&P Dow Jones Indices.

In its mid-year report on fund performance, S&P found that more than half of Canadian equity funds beat their indexes in the first six months of 2022 and for the 12 months to June 30.

S&P’s SPIVA Scorecard, which tracks the results of actively managed funds against their benchmarks, reported that only 43% of actively managed Canadian equity funds trailed their benchmarks in the first six months of 2022 and in the 12 months ended June 30. That marks the industry’s best performance since 2013.

Want more immediate, memorable insights? Listen to this Soundbites episode, featuring Derek Brown of Beutel Goodman Investment Counsel.

The report “shows a return to outperformance for a majority of actively managed domestic equity funds during the turmoil of [the first half of] 2022,” said Joe Nelesen, senior director, index investment strategy at S&P Dow Jones Indices, in a release.

“A focus on fundamentals and a lower weight in the very largest stocks could have helped, as well as avoiding some of the very worst performers in the Canadian markets.”

Within the S&P/TSX Composite index, 55% of stocks underperformed the benchmark in the first half and 45% outperformed, S&P said.

There was also a stark divergence between sectors, with the oil and gas sector supplying nine of the 10 top performers, while the tech sector “was an overwhelmingly negative contributor.”

Against this backdrop, “Avoidance of a few significant decliners or the inclusion of a few significant winners presented the clearest paths to outperformance.”

Overall, while the S&P/TSX Composite Index dropped 9.9% in the first half, the Canadian equity category was down 9.0% on an equal-weighted basis (9.3% on an asset-weighted basis), the report said.

However, the report also noted that small- and mid-cap funds were an exception to the trend, with 80% of these funds underperforming their benchmarks in the first half.

The small- and mid-cap category dropped 16.4% on an equal-weighted basis (15.6% asset-weighted) in the first half, S&P reported, compared with a 10.9% decline for the S&P/TSX Completion index.

Over longer time periods though, the small- and mid-cap category has the fewest underperformers, S&P noted — about two thirds of the funds in the category underperform their benchmarks over five years, compared with 91% of all active managers.

Foreign equity managers didn’t fare as well either in the first half.

Of U.S. equity funds, 61.3%, underperformed the S&P 500 index in the first half, while 64% of international equity funds trailed the S&P EPAC LargeMidCap index, the report said.