Does Your Fund Manager Trade on the News? Media Coverage, Mutual Fund Trading and Performance

We study the relation between mutual fund trades and media coverage of stocks. We find that on average mutual funds tend to trade high-coverage stocks. Meanwhile, funds display substantial cross-sectional heterogeneity in terms of their propensity to trade high-coverage stocks. The more likely is a fund to trade high-coverage stocks, the lower is the fund's various measures of alpha. Moreover, these propensities are relatively persistent over time, and they help predict future fund alphas