Benefits from social trading? Empirical evidence for certificates on wikifolios

Andreas Oehler, Matthias Horn and Stefan Wendt

International Review of Financial Analysis, 2016, vol. 46, issue C, 202-210

Abstract: Social trading describes the idea that signal providers make their investment decisions available to other investors who follow them. The performance of social trading has hardly been in the focus of research so far. We analyze the performance of 1084 wikifolio certificates used in social trading and issued in 2012 and 2013. We apply factor models to analyze these certificates' returns and alphas relative to benchmark indexes. We find that, on average, wikifolios do not outperform the market. However, wikifolios with geographical focus provide better performance than those without. Furthermore, the best performing wikifolios earn significant short-term excess returns.

Keywords: Social trading; Social investing; Retail investors; Wikifolios; Herd behavior (search for similar items in EconPapers)
JEL-codes: D14 G11 G23 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:46:y:2016:i:c:p:202-210

DOI: 10.1016/j.irfa.2016.05.007

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