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...

By reaching a broad population of investors, mass media can alleviate informational frictions and affect security pricing even if it does not supply genuine news. We investigate this hypothesis by studying the cross-sectional relation between media coverage and expected stock returns. We find...