Fund companies regularly send shareholder letters to their investors. We use textual analysis to investigate whether these letters' writing style influences fund flows and whether it predicts performance and investment styles. Fund investors react to the tone and content of shareholder letters:...

Fund companies regularly send shareholder letters to their investors. We use textual analysis to investigate whether these letters matter for fund flows and whether they predict performance and investment styles. We find that fund investors react to the writing style of shareholder letters; a...