Tweeting for Money: Social Media and Mutual Fund Flows

55 Pages Posted: 29 Dec 2020 Last revised: 21 Jul 2022

See all articles by Javier Gil-Bazo

Javier Gil-Bazo

Universitat Pompeu Fabra; UPF Barcelona School of Management; Barcelona School of Economics

Juan Felipe Imbet

Université Paris Dauphine - Department of Finance

Date Written: July 21, 2022

Abstract

We investigate whether asset management firms use social media to persuade investors. Combining a database of almost 1.6 million Twitter posts by U.S. mutual fund families with textual analysis, we find that money flows respond positively to tweets with a positive tone. Further analysis supports the persuasion hypothesis: Tweets work best when they convey advice or views on the market, when uncertainty about managerial quality is higher, and when investor sentiment is higher. In contrast, we find no evidence that asset management companies use social media to alleviate information asymmetries by either lowering search costs or disclosing privately observed information.

Keywords: social media; Twitter; mutual fund families; mutual fund flows; machine learning; textual analysis.

JEL Classification: G11, G23, D83

Suggested Citation

Gil-Bazo, Javier and Imbet, Juan Felipe, Tweeting for Money: Social Media and Mutual Fund Flows (July 21, 2022). Université Paris-Dauphine Research Paper No. 3719169, Available at SSRN: https://ssrn.com/abstract=3719169 or http://dx.doi.org/10.2139/ssrn.3719169

Javier Gil-Bazo

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

UPF Barcelona School of Management ( email )

Carrer de Balmes, 132, 134
Barcelona, 08008
Spain

Barcelona School of Economics ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Juan Felipe Imbet (Contact Author)

Université Paris Dauphine - Department of Finance ( email )

Place du Maréchal de Lattre de Tassigny
Paris Cedex 16, 75775
France

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