Do Swedish fund managers create value? A study on the skill of fund managers of actively managed Swedish funds

Abstract: This thesis investigates the performance and skill of fund managers in the Swedish mutual fund industry, challenging the traditional view that actively managed funds underperform the market. Utilizing a novel approach, the study defines skill as 'realized value added', which incorporates gross alpha and assets under management. The research focuses on two main aspects: the overall skill of Swedish fund managers and the comparative performance of environmentally focused (green) and traditional (brown) funds during different market conditions, including financial crises. Key findings reveal that Swedish fund managers demonstrate the ability to generate positive value on average. The study also uncovers significant variations in fund performance during different market conditions, highlighting the dynamic nature of fund management. Additionally, it provides insights into the performance of green funds, which exhibit distinct patterns compared to their brown counterparts, especially during periods of financial instability.