Many studies have been published on active versus passive management, yet there was a significant gap in how Scandinavian-managed equity funds perform during intense crises, specifically the 2019-2023 period. The study investigated whether Scandinavian actively managed funds could achieve higher risk-adjusted returns than Scandinavian passively managed funds during two intense crises, Covid-19 and the Russian-Ukraine war. The efficient market hypothesis (EMH) was introduced to analyze markets' efficiency and help determine active managers' ability to outperform passive funds with market information. The data consisting of 95 funds was analyzed with a direct quantitative comparative analysis guided by objective ontology and positivist epistemology. To analyze the data over time, a cross-sectional time series was implemented to analyze patterns during the five-year period. The comparison between active and passive funds was performed with the risk-adjusted return, measured by the Sharpe ratio. Our findings showed consistent results that active fund management lacks a significant advantage over passive index funds in four out of five portfolios, aligning with our hypothesis. The results also support the EMH, suggesting that there is market efficiency. The findings provide implications for investors' decision-making process as the study contributes to the discussion on whether active or passive funds are the superior choice. During the period of 2019-2023, the optimal investment decision to achieve the highest risk-adjusted return was to invest in passively managed funds. While the research acknowledges behavioral aspects of fund managers during crises, future research should delve deeper into qualitative factors influencing the management strategy.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-64447 |
| Date | January 2024 |
| Creators | Räftegård, Fabian, Thyberg, Adam |
| Publisher | Jönköping University, Internationella Handelshögskolan |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| 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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