The recent mania of Reddit darling GameStop raises questions about social media’s impact on behaviours of institutional investors such as mutual funds. We examine whether and why mutual funds hold “sentimental” stocks that are heavily mentioned or with bullish views on social media. Based on a sample of 1,028 US domestic equity funds between 2011 and 2016, we find that mutual funds holding more of these stocks have short-lived outperformance over their peers. Such funds also attract substantially higher fund flows, especially those of individual investors. Our results suggest that mutual fund managers cater to investors’ sentimental demand displayed on social media to boost short-term performance and to attract flows.