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Running a mutual fund: Performance and trading behavior of runner managers

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  • Dayani, Arash
  • Jannati, Sima

Abstract

This paper examines the relationship between the representation of marathon runners in a fund management team and its future performance. We find that funds with a larger proportion of runner managers have a higher level of risk-adjusted excess returns. We also find that these funds have a lower level of the disposition bias, deviate more from their benchmark portfolios, hold fewer stocks in their portfolios, and hold their stocks for a longer duration. Also, they tend to hold more stocks that are about to experience desirable earnings outcomes. Overall, the results suggest that personality traits that affect achievements in other dimensions of life may translate into fund management success.

Suggested Citation

  • Dayani, Arash & Jannati, Sima, 2022. "Running a mutual fund: Performance and trading behavior of runner managers," Journal of Empirical Finance, Elsevier, vol. 69(C), pages 43-62.
    • Handle: RePEc:eee:empfin:v:69:y:2022:i:c:p:43-62
    DOI: 10.1016/j.jempfin.2022.07.011
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Managerial characteristics; Mutual fund performance; Distance runners; Disposition effect; Investment style;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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