The firm acted after it was hit by $250 billion of client redemptions from 2008 to 2013.

“We believe in what we do, even if at times the world doesn’t,” says Timothy Armour, Capital’s head of mutual funds.

No one at the $1.1 billion Thornburg Global Opportunities Fund, a unit of Santa Fe, New Mexico–based Thornburg Investment Management, thinks the indexes can’t be beaten. Since it was created in July 2006, the global stock fund has crushed its benchmark, the MSCI All-Country World Index, by an average of 6 percentage points a year. It tops the Bloomberg Markets ranking of global equities funds.

Thornburg was No. 1 in two categories. Left to right: Jason Brady of Strategic Income; Brian McMahon and W. Vinson Walden of Global Opportunities.

Co-manager W. Vinson Walden attributes the success to good research and a willingness to be patient. In 2010, the fund bought Brazil Foods, a São Paulo poultry producer whose shares were depressed by concerns about rising commodities prices. Walden saw something else: a low-cost producer with the potential to expand in Brazil and other emerging markets.

“We saw a nice tail wind that would last for years,” he says.

When the stock slumped again in 2013 due to management turnover, Walden bought more. As an active manager, he says, he can pounce when a company’s share price dips below its long-term value.

Brazil Foods traded at more than 60 reais a share on Dec. 31, up from 20 to 25 reais when the fund first purchased the stock.

“It’s been a gift that keeps giving,” Walden wrote in an e- mail.

Another luxury active managers enjoy: making a big bet on one stock. Longleaf Partners Small-Cap Fund started last year with 13 percent of its money in cement maker Texas Industries.

“We are not afraid to make an outsized bet where we like something,” says Ross Glotzbach, one of the managers of the $4.4 billion fund.

Texas Industries agreed to be bought by Martin Marietta Materials at a premium in January 2014, which helped the Longleaf fund earn the No. 1 ranking among small-cap U.S. equities funds.

The Longleaf small-cap fund, run by Tennessee-based Southeastern Asset Management, boasts roughly twice the return of its benchmark, the Russell 2000 Index, over the past 20 years. The fund’s managers will hold cash when they can’t find attractive stocks. Longleaf also buys beaten-down companies when it believes the long-term prognosis is bright. The fund added energy shares in the fourth quarter as oil prices collapsed.

“We are contrarians, and we like to buy things for less than they’re worth,” Glotzbach says.

The stampede to index funds and ETFs is not as pronounced among bond managers as among stock pickers. Only about 19 percent of the money in bond mutual funds and ETFs is indexed, according to Morningstar. Still, active bond managers have to demonstrate they are worth the higher fees they charge compared with indexers.

Daniel Ivascyn has done that. The $40 billion Pimco Income Fund he has run since 2007 outperformed 99 percent of peers over the five years ended on Dec. 31, while returning an average of 11.6 percent a year. Its benchmark, the Barclays U.S. Aggregate Index, gained an average of 4.5 percent annually.

The numbers were good enough to earn Pimco Income the top ranking among U.S. corporate bond funds for the second year in a row. They also helped Ivascyn win a new job, group chief investment officer. He got the title after bond legend Bill Gross abruptly left Pimco in September.

Ivascyn and co-manager Alfred Murata divide their fund into two buckets: one with high-yielding assets that will do well in a strong economy, and the other with investments that can thrive if the economy weakens. A longtime Ivascyn favorite filled the first pail last year: bonds made up of mortgages that aren’t backed by Fannie Mae, Freddie Mac, or Ginnie Mae. Those bonds have rallied as the U.S. housing market has revived.