Do Mutual Fund Media Recommendations Hold Value? An Empirical Analysis of the Wall Street Journal's SmartMoney Fund Screen

37 Pages Posted: 25 Feb 2008 Last revised: 27 Feb 2012

See all articles by George Comer

George Comer

Georgetown University - Department of Finance

Javier Rodriguez

University of Puerto Rico; University of Puerto Rico - Escuela Graduada de Administración de Empresas (EGAE)

Date Written: August 22, 2011

Abstract

We examine the mutual funds that appeared in the Wall Street Journal’s SmartMoney Fund Screen column from September 2004 through July 2009. We find that the majority of funds listed do not have Morningstar’s highest five star rating. Regardless of Morningstar rating, the average prepublication performance of the funds is significantly higher than the benchmarks used to measure performance. Post publication, fund performance declines, and the decline is statistically significant across our performance measures. However, additional tests indicate that the SmartMoney funds which have a three or four star rating from Morningstar are better investment values than corresponding five star Morningstar funds with the same prospectus objective and expense ratio.

Keywords: mutual funds, SmartMoney, fund screen

JEL Classification: G10, G11, G12

Suggested Citation

Comer, George and Rodriguez, Javier, Do Mutual Fund Media Recommendations Hold Value? An Empirical Analysis of the Wall Street Journal's SmartMoney Fund Screen (August 22, 2011). Available at SSRN: https://ssrn.com/abstract=1095309 or http://dx.doi.org/10.2139/ssrn.1095309

George Comer (Contact Author)

Georgetown University - Department of Finance ( email )

585 Hariri Building
Georgetown University
Washington, DC 20057
United States
202-687-0676 (Phone)

Javier Rodriguez

University of Puerto Rico ( email )

Río Piedras
Puerto Rico

University of Puerto Rico - Escuela Graduada de Administración de Empresas (EGAE) ( email )

San Juan, 00918
Puerto Rico

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