Richard Evans, from University of Virginia, will present his research work. 

(Not) Everybody’s Working for the Weekend: A Study of Mutual Fund Manager Effort

We develop a novel measure of effort based on unique observations of weekend work activity and revisit fundamental questions of asset management: how does effort relate to incentives, and how does effort affect performance? Mutual fund managers facing competitive incentives work more weekends, particularly following outflows and increased tracking error. Also, heightened effort predicts improved future returns—especially among funds with competitive incentives, high active share, and low turnover—and using exogenous variation in local weather we demonstrate a causal link between effort and returns. Finally, we show that the outperformance arises from a mixture of effort, targeted firm-research, and selectively trading the right stocks.