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http://ssrn.com/abstract=1934978
 
 

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Winners in the Spotlight: Media Coverage of Fund Holdings as a Driver of Flows


David H. Solomon


University of Southern California - Marshall School of Business

Eugene F. Soltes


Harvard Business School

Denis Sosyura


The Stephen M. Ross School of Business at the University of Michigan

September 11, 2013

Journal of Financial Economics (JFE), Forthcoming

Abstract:     
We show that media coverage of mutual fund holdings affects how investors allocate money across funds. Fund holdings with high past returns attract extra flows, but only if these stocks were recently featured in the media. In contrast, holdings that were not covered in major newspapers do not affect flows. We present evidence that media coverage tends to contribute to investors’ chasing of past returns rather than facilitate the processing of useful information in fund portfolios. Our evidence suggests that media coverage can exacerbate investor biases and that it is the primary mechanism that makes fund window dressing effective.

Number of Pages in PDF File: 42

Keywords: media, attention, mutual funds, window-dressing

JEL Classification: G11, G14

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Date posted: September 30, 2011 ; Last revised: September 12, 2013

Suggested Citation

Solomon, David H. and Soltes, Eugene F. and Sosyura, Denis, Winners in the Spotlight: Media Coverage of Fund Holdings as a Driver of Flows (September 11, 2013). Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1934978 or http://dx.doi.org/10.2139/ssrn.1934978

Contact Information

David H. Solomon
University of Southern California - Marshall School of Business ( email )
Los Angeles, CA 90089
United States
Eugene F. Soltes
Harvard Business School ( email )
Boston, MA 02163
United States
Denis Sosyura (Contact Author)
The Stephen M. Ross School of Business at the University of Michigan ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
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