Does Working from Home Decrease Performance? Evidence from the Mutual Fund Industry
67 Pages Posted: 4 Sep 2020 Last revised: 15 Mar 2021
Date Written: October 9, 2020
This paper studies the effect of remote work on actively managed equity mutual fund returns and managerial skills. We use the staggered state-level stay-at-home orders in the U.S. as the difference-in-differences strategy. After working from home, fund daily net excess returns over market returns decrease by 90 basis points per day, corresponding to a 6-million-dollar economic loss per day than investing in market portfolios. The findings are relevant to decline in managerial skills, especially for funds managed by teams, in a family, or with multitasking arrangements. These results are robust under recent policy changes.
Keywords: Mutual Funds, COVID-19, Work from Home, Remote Work, Stay-at-home Order, Managerial Skill
JEL Classification: G23, G11, G38, J24
Suggested Citation: Suggested Citation