This paper investigates whether “skin in the game” has an impact on the actively managed funds’ performance. Based on the agency theory where an agent and a principal in different scenarios might have access to different information etc., can result in differences in financial decisions. In this case it could be whether to invest in the fund they manage or not. We examine the time period from 2018 to 2020, where each year has been analyzed as well as the three-year period. To perform the tests, information on the actively managed funds’ managers has been collected from 160 funds, along with the returns of each year and fund. Both funds with skin in the game and without have been found in Large Value Funds at Morningstar, where all of them are actively managed value or equity funds. We have analyzed 80 funds with skin in the game and 80 funds without. After comparisons to the index Russel 1000 Value Total Return USD, we tested whether there are significant differences in performance between the two groups. What the results indicate is that differences are significant which might be due to the fact that managers have skin in the game, but also that these funds tend to perform better.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:lnu-104786 |
| Date | January 2021 |
| Creators | From, Nora, Chamoun, Elin |
| Publisher | Linnéuniversitetet, Institutionen för nationalekonomi och statistik (NS) |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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