Harvard Business School2014-07-16 11:01 AM

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

Author

Eugene F. Soltes, David H. Solomon and Denis Sosyura

Abstract
We show that media coverage of mutual fund holdings affects how investors allocate money across funds. Controlling for fund performance, fund holdings with high past returns attract extra flows only if these stocks were recently featured in major newspapers. In contrast, holdings that were not covered in the media do not affect flows. We present evidence that media coverage tends to amplify investors' chasing of past returns rather than facilitate the processing of useful information in fund portfolios. Fund managers exploit this behavior by purchasing media-covered past winners at reporting dates, a strategy most prevalent among poorly performing funds. Our evidence suggests that media coverage can exacerbate investor biases and that it is the primary mechanism that makes window-dressing effective.

Full Article
Published on Journal of Financial Economics in July, 2014.
http://www.hbs.edu/faculty/Pages/item.aspx?num=45885

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ABOUT THE AUTHOR

Harvard Business School

哈佛商学院是世界最著名的商学院之一,是常春藤联盟商学院之一,早先名为”哈佛大学工商管理研究所“。美国教育界有这么一个说法:哈佛大学可算是全美所有大学中的一项王冠,而王冠上那夺人眼目的宝珠,就是哈佛商学院。哈佛商学院的名望,不仅是由于她首创了MBA学位,也不仅是因为她在管理教学中首创了案例教学法,还不仅是基于她拥有一个庞大的明星教授群,而是因为她确确实实向社会输送了大批极其优秀的人才。正是这些毕业生在社会上的卓越表现,才使哈佛商学院扬名世界。

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