In an otherwise dismal year for professional stock pickers, July offered some hope.
Large-cap mutual fund managers put in a strong performance, with 58 percent beating their Russell 1000 index benchmark, according to data from Bank of America Merrill Lynch. The average manager in the category saw a 4 percent return for the month, against the Russell's gain of 3.8 percent.
The returns came against the backdrop of a market that snapped back after the post-Brexit selloff. Sectors that had been punished during the panic over Britain leaving the European Union showed strong returns as market sentiment improved and the major averages moved into solidly positive territory for the year.
The outperformance happened even as correlations, or the tendency of stocks to move up and down together, remained elevated at 34 percent and the dispersion of sector returns also was low.
"Part of it was a pretty decent earnings season, and just general sentiment in the market was better," said Aaron Jett, vice president of global equity research at Bel Air Investment Advisors. "But more importantly, there was totally different leadership in the market vs. the first half of the year."