Does Media Coverage of Stocks Affect Mutual Funds' Trading and Performance?
We study the relation between mutual fund trades and mass media coverage of stocks. We find that funds exhibit persistent differences in their propensity to buy media-covered stocks. Moreover, this propensity is negatively related to their future performance. Funds in the highest propensity decile u...
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| Veröffentlicht in: | The Review of financial studies 2014-12, Vol.27 (12), p.3441-3466 |
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| container_end_page | 3466 |
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| container_title | The Review of financial studies |
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| creator | Fang, Lily H. Peress, Joel Zheng, Lu |
| description | We study the relation between mutual fund trades and mass media coverage of stocks. We find that funds exhibit persistent differences in their propensity to buy media-covered stocks. Moreover, this propensity is negatively related to their future performance. Funds in the highest propensity decile underperform funds in the lowest propensity decile by 1.1% to 2.8% per year. These results do not extend to fund sells, likely because of funds' inability to sell short. Overall, the findings suggest that professional investors are subject to limited attention. |
| doi_str_mv | 10.1093/rfs/hhu056 |
| format | Article |
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We find that funds exhibit persistent differences in their propensity to buy media-covered stocks. Moreover, this propensity is negatively related to their future performance. Funds in the highest propensity decile underperform funds in the lowest propensity decile by 1.1% to 2.8% per year. These results do not extend to fund sells, likely because of funds' inability to sell short. 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| ispartof | The Review of financial studies, 2014-12, Vol.27 (12), p.3441-3466 |
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| language | eng |
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| source | Jstor Complete Legacy; Oxford University Press Journals All Titles (1996-Current); EBSCOhost Business Source Complete |
| subjects | Coefficients Economic performance Financial analysis Financial management Growth funds Investment trusts Investors Journalism Mass media Media coverage Mutual funds Portfolio management Portfolio performance Securities trading Stock exchange Stock purchases Stock sales Stocks Studies Trade |
| title | Does Media Coverage of Stocks Affect Mutual Funds' Trading and Performance? |
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