Mutual Fund Fees & Return In Perspective of The Efficient Market Hypothesis - Empirical evidence in Sweden between 2014-2024

Sammanfattning

This study examines whether a private investor should choose to invest in a relatively cheap or expensive mutual fund and if the funds, by applying an active management style, can outperform the passive ones. This was done by analyzing a dataset consisting of 101 equity mutual funds provided by the four largest banks in Sweden that had been on the market between 2014 and 2024. We ran multiple regressions to determine if there is a relationship between the fees and the return and if the management style had an impact on the return of the fund. The main finding of the research was that the banks could not justify their high-fee funds since we found evidence that higher fees were associated with lower returns. Therefore a Swedish private investor should be aware of the impact that the fees have and in particular should not invest in relatively expensive funds and should instead invest in low-fee funds to generate the highest possible return.