Are Mutual Fund Managers Paid For Investment Skill?

First draft: February 10, 2017. The authors gratefully acknowledge financial assistance from grants obtained from the NYU Stern Center for Global Business and the Economy (2013), Simon School of Business (2013), and Stockholm University. The research leading to these results has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC Grant Agreement no. [312842]. We are grateful to Mohsan Bilal, Vadim Elenev, Annja Karlsson, Louise Lorentzon, Mikael Nordin, and Anh Tran for excellent research assistance. We thank Petter Lundberg at SCB for assistance with our data files. We also benefited from several conversations with current and former Swedish mutual fund managers and owners of mutual fund companies. We thank Xavier Gabaix, Ralph Koijen, Lubos Pastor, Andrei Simonov, Robert Stambaugh, Paul Tetlock, Jules van Binsbergen, Mindy Zhang, and seminar participants at the University of Illinois at Urbana-Champaign, the University of Pennsylvania's Wharton School, and Washington University at St. Louis for comments and suggestion. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.