Does Working from Home Impair Mutual Fund Performance?

54 Pages Posted: 4 Sep 2020 Last revised: 22 Apr 2022

See all articles by Charles Cao

Charles Cao

Pennsylvania State University

Timothy T. Simin

Pennsylvania State University

Han Xiao

Pennsylvania State University

Date Written: December 21, 2021

Abstract

We use staggered U.S. state-level stay-at-home COVID-19 pandemic orders to study the effect of remote work on actively managed mutual fund performance. After implementation of working from home mandates, daily fund returns decrease by 90 basis points per day, corresponding to a daily $6 million economic loss per fund relative to investing in the market portfolio. Remote work decreases measures of managerial skill, especially for funds not within a family and funds which are non-team managed. Mandated working from home during the COVID-19 pandemic period impaired mutual fund performance by increasing frictions, which hinder idea sharing and information flows.

Keywords: Mutual Funds, COVID-19, Work from Home, Remote Work, Stay-at-home Order

JEL Classification: G23, G11, G38, J24

Suggested Citation

Cao, Charles and Simin, Timothy T. and Xiao, Han, Does Working from Home Impair Mutual Fund Performance? (December 21, 2021). Available at SSRN: https://ssrn.com/abstract=3684957 or http://dx.doi.org/10.2139/ssrn.3684957

Charles Cao

Pennsylvania State University ( email )

Department of Finance
Smeal College of Business
University Park, PA 16802
United States
814-865-7891 (Phone)
814-865-3362 (Fax)

HOME PAGE: http://www.personal.psu.edu/qxc2/cao.html

Timothy T. Simin

Pennsylvania State University ( email )

University Park, PA 16802
United States
814-865-3457 (Phone)

HOME PAGE: http://timsimin.net

Han Xiao (Contact Author)

Pennsylvania State University ( email )

University Park, PA 16802
United States

HOME PAGE: http://han-xiao.weebly.com

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