Active Fund Performance : A meta analysis on active fund performance , the value of active funds in crisis and the active share measurement
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- Master Thesis 
I present in this meta-analysis a comprehensive analysis of active fund management. The master thesis is done using both the ‘conventional view’ of active fund management based upon research by Carhart (1997) complemented by Malkiel (1995), Gruber (1996) and Jensen (1968). The thesis further study the value of active funds in crisis, and the use and value of the active share measurement. The question on the value of active fund management is discussed using results on fund performance after fees, the persistence of well performing funds and the skill of active fund managers. Research suggests that most active mutual funds does not create excess return the investor, and should therefore not be invested in. It is further clear that there are skilled fund managers but the problem rather being the profits taken by the operating cost of said fund. There are also tendencies of persistence among both the well performing and poorly performing funds. The second research about active fund management in crisis investigates how these funds have performed and behaved during earlier crisis, and how they could be of value to investors. The results show that active mutual funds have the skills and opportunity to perform better during recessions, resulting in better performance compared to expansion or calm markets, hence an outperformance of passive funds in less efficient markets. Research also show that the active funds have utility beyond money for investors in a diversified portfolio. As for the third research question about the active share measurement, the strengths and weaknesses are studied. Research shows that funds with a higher active share perform better compared to funds with a low active share. As for the use of active share as a predictor of performance or skill literature is skeptical as active share do not describe the additional volatility and larger downside risk when having a more active management.