Active Strategy and Other Key Factors of Mutual Funds' Performance

The demand for mutual funds is determined by their ability to convince investors to achieve their investment goals. Whether mutual fund managers can collect and analyze existing information in such a way as to select assets that entail returns above the market or not, that is a very significant question for both financial industry theorists and practitioners. To compare funds with active strategies and passive ones we use panel data models with the excess return over the benchmark as a dependent variable. Our sample was constructed from US funds over 14 years of observations from 2006 to 2019. We include funds which invest mostly in different US sectors with SP500 as the benchmark. It turns out that active funds don't give significant benefit. Nevertheless, the significancy of the spread between long term and short-term US government Treasury bonds yield confirms that the actively managed funds gain more on the expectation of the market's growth than the passive ones.