TV Media Sentiment, Mutual Fund Flows and Investment Decisions: They Don’t Put Their Money Where Their Sentiment Is

29 Pages Posted: 18 Feb 2020

See all articles by Hans-Jörg Naumer

Hans-Jörg Naumer

WHU - Otto Beisheim School of Management

Date Written: January 13, 2020

Abstract

The central role of the media for people’s minds and for capital markets has been analyzed by a broad range of literature, nourished from several strands of academic research. Applying a vector autoregression on a unique set of TV news, consumer sentiment and excess flows of mutual funds, I find evidence that daily TV news is reflected in consumer sentiment and that this reflection varies with the news topics. However, I uncover no evidence of an effect on viewers’ allocation decisions. Mutual fund investors seem to put their money neither where their newly won insights from TV news are, nor where their sentiment is. The findings are robust to different measures of the fund flows and an alternative indicator for the news sentiment. The results indicate a direction for further studies on a more micro level.

Keywords: media sentiment, excess flows, mutual funds, TV, investor sentiment, investment decisions

JEL Classification: D14, D81, G11, G14, G23, L82

Suggested Citation

Naumer, Hans-Jörg, TV Media Sentiment, Mutual Fund Flows and Investment Decisions: They Don’t Put Their Money Where Their Sentiment Is (January 13, 2020). Available at SSRN: https://ssrn.com/abstract=3523587 or http://dx.doi.org/10.2139/ssrn.3523587

Hans-Jörg Naumer (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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