The Disposition Effect in Mutual Funds' Trades: The Role of Managers' Endurance

We use long-distance running as a quasi-natural experiment and study whether endurance activities affect fund managers' trading behavior. We find that funds with a larger share of marathon runner managers are less prone to the disposition effect. A higher representation of runner managers also predicts larger risk-adjusted excess returns. To account for endogeneity, we use the annual number of marathon events in funds’ states as an instrument for the proportion of runner managers and find a consistent outcome. Overall, these results provide behavioral evidence for the disposition effect among fund managers.