We uncover a positive relation between advertising expenditure and skill in the mutual fund industry. Motivated by Kihlstrom and Riordan (1984) and Milgrom and Roberts (1986), we find that funds that advertise in magazines outperform their peers by 83 basis points in the subsequent year. This relation is primarily driven by mutual fund advertisements that contain information on past fund performance relative to a benchmark. We document that the performance differential between advertising and non-advertising funds is largest when investment opportunities are high and persists for 36 months. Generally, the positive relation between advertising expenditure and future fund flows is not sensitive to the content of advertisements and is strongest when investor attention is high. Evidence in this paper is consistent with economic signaling theory. JEL classification: G11; G18; G23; M31; M3

中文翻译：

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共同基金广告的信息量：广告能否向投资者传达基金质量？

我们发现共同基金行业的广告支出和技能之间存在正相关关系。在 Kihlstrom 和 Riordan（1984）以及 Milgrom 和 Roberts（1986）的推动下，我们发现在杂志上做广告的基金在接下来的一年中比同行高出 83 个基点。这种关系主要是由包含过去基金表现相对于基准的信息的​​共同基金广告驱动的。我们发现，当投资机会高且持续 36 个月时，广告基金和非广告基金之间的业绩差异最大。一般而言，广告支出与未来资金流向的正相关关系对广告内容不敏感，在投资者关注度高时最强。本文中的证据与经济信号理论是一致的。JEL 分类：G11；G18; G23; M31; M3