An Empirical Analysis of Active Fund Management & Performance 2011-2020

 Active fund management requires costly information and labor, and this is covered through an investor paying management fee. The investor can, in return for this fee, expect the manager to create the highest possible return in accordance with the fund's stated risk profile. These funds' performance will be analyzed using various risk-adjusted performance factors and compared to its receptively suitable benchmark that represents the market.

Based on the funds given by the Norwegian individual investor, I will investigate how six active equity funds perform, particularly the mutual funds invested in Norway over a period of 10 years. The period runs from January 2011 to November 2020. I also will identify characteristics among those who have performed best and worst. The report will also take a closer look at the value funds view of risk and if value funds are riskier. I want to uncover whether the mutual funds' possible excess return is due to pure coincidence or skilled managers.

Data for these six funds, as well as their benchmark have been obtained from Datastream in Norwegian currency. I have chosen to use the Norwegian risk-free interest rate which is the three-month government bonds. For the t-tests performed in the reports, a 95 percent confidence interval has been used. All analyzes are based on monthly logarithmic change in returns, and T-critical for all T-tests is set to 1.96. All results are reported on an annual basis and NOK in the report. The analyzes do not assume any transaction costs. See full analysis here.