Summary:
The evolution of the mutual fund industry, along with growing retail investor participation, has made mutual funds a significant investment vehicle for individual investors in China. However, a persistent issue in China's mutual fund market is the significant gap between the actual returns of fund investors and the returns of the funds. Behavioral biases, or deviations from optimal investment decisions, are primary drivers of this phenomenon, and existing studies have explored investor biases from various perspectives. Central to all financial activities, information flow makes the news media a vital channel for market-relevant news that guides asset allocation choices. Understanding how news media affect fund investors in the process of obtaining and using financial information, particularly reports on fund managers, is crucial to addressing behavioral biases. However, few studies have employed micro-level trading data to investigate the origins and mechanisms of these biases from the perspective of news media, especially regarding media coverage of fund managers. In light of this, using micro-level trading data from individual investors provided by a major brokerage firm, this paper examines the impact of media attention of fund managers on individual investors' trading behaviors and explores the underlying mechanisms from the perspective of limited attention bias. Empirical findings reveal that media coverage about fund managers significantly affects net subscription behaviors. Specifically, funds managed by fund managers with more media coverage experience higher net subscription rates among individual investors. If a fund manager was reported by the media last month, the average net subscription rate of investors is 2.4% higher than that of funds whose managers were not reported. For every 1% increase in the number of media coverage, the average net subscription rate of investors increases by 1.2%. In terms of the mechanisms underlying this effect, media coverage of fund managers enhances the salience of the highlighted managers in investors' choice sets. This effect increases net subscription behaviors primarily through drawing investor attention. Additionally, media coverage of fund managers does not predict future fund returns, and the trading behaviors driven by such coverage fail to generate excess returns. Finally, in terms of heterogeneity, investors without professional experience, male investors, middle-aged and older investors, those with lower asset levels, and those with higher trading frequency are more susceptible to media coverage of fund managers, leading to increased net buying of funds managed by covered managers. Funds with higher past returns, smaller size, and shorter duration exhibit stronger investor response to such media coverage. Articles published in media outlets with higher impact and those with shorter length exert a greater influence on investors' net purchase behavior, and media coverage of star fund managers has a more pronounced effect. Compared to the existing research, this paper has three marginal contributions. First, this paper provides more detailed micro-level evidence for literature on factors affecting investors' subscription and redemption decisions. Prior research has primarily relied on net inflow of funds as a proxy for individual investor behavior. This paper constructs a high-frequency, accurate monthly net subscription rate metric using all fund transaction records from clients of a leading brokerage firm. It reveals that media coverage of fund managers significantly influences individual investor behavior. Second, the study extends the understanding of media influence on financial market participants. While existing research has focused on media's effect on asset prices, few have explored how media coverage impacts individual investor behaviors directly. By focusing on the role of media coverage of fund managers, this study highlights the catagory-learning feature of investor attention. Third, this paper offers a novel perspective to explain the significant underperformance of investor returns compared to fund returns in China's fund market. Existing literature focuses on traditional behavioral biases such as the disposition effect and gender bias. In contrast, this study finds that media coverage of fund managers triggers investors' irrational attention through the salience effect, driving net purchase behavior that does not predict future fund performance and ultimately leads to investor losses. Therefore,it provides a theoretical basis for enhancing investor education and promoting high-quality development of the industry.
贺佳, 屈波, 郭俊汝. 基金经理媒体报道与个体投资者行为——来自基金申赎微观大数据的证据[J]. 金融研究, 2025, 546(12): 188-206.
HE Jia, QU Bo, GUO Junru. Media Attention of Fund Managers and Individual Investor Behavior: Evidence from Micro Big Data of Fund Investors' Transactions. Journal of Financial Research, 2025, 546(12): 188-206.
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