Do two heads think better than one? Risk Differences in Gender and Team vs. Single Managed Mutual Equity Funds in Sweden

Abstract: This empirical study examines whether team or single-managed mutual equity funds in the Swedish fund market are more risk-prone conditionally on the management structure during the last five years (2018-2022). Additionally, the gender of each fund manager is analyzed in order to find answers regarding gender's risk approach in investment decisions. Further, a comparison between team and single-managed funds performances will explain which management structure created the most extreme returns related to their risk exposure. In order to discover the significant results stated above, a series of panel regressions is completed based upon three different models including the dependent variable volatility as a measure for each fund's total risk and a variation of explanatory variables with Teamst and Gendert as the main variables of interest. The empirical results from each panel regression imply that operating in teams will lower the total risk by approximately 2.5 percentage points. Further gender does have a role in the risk approach, females tend to be more risk averse than their male counterparts by 2.2 pp. We cannot however say anything significant about women's influence on total risk when working in teams. Finally, single-managed mutual equity funds seem to have more extreme outcomes – both positive and negative – when analyzing their lagged, rolling, quarterly returns through various scatter plots and summary statistics which falls in line with single-managed funds taking more risk.