Exploring style herding by mutual funds

[en] We study intentional herding in investment styles by mutual funds, and its consequences. We find that style herding is significant and persistent. Herding tends to increase after periods of high market volatility and decrease with sentiment, consistent with the intentional character of herding. Furthermore, we find that herding is related to changes in market dynamics. Finally, we find that herding in certain styles tends to temporarily increase mutual funds’ performance, whereas it reduces flows. Overall, the results illustrate that intentional herding in styles is prevalent and has important consequences for market dynamics, fund managers, and investors.

Disciplines :

Finance

Author, co-author :

Santi, Caterina ; Université de Liège - ULiège > HEC Liège : UER > UER Finance et Droit : International Finance

Zwinkels, Remco C.J.

Language :

English

Title :

Exploring style herding by mutual funds

Publication date :

March 2023

Journal title :

Journal of International Financial Markets, Institutions and Money

ISSN :

1042-4431

eISSN :

1873-0612

Publisher :

Elsevier BV

Pages :

101762

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://api.elsevier.com/content/article/PII:S1042443123000306?httpAccept=text/xml

Available on ORBi :

since 24 March 2023

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