Exploring style herding by mutual funds

Caterina Santi and Remco C.J. Zwinkels

Journal of International Financial Markets, Institutions and Money, 2023, vol. 85, issue C

Abstract: 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.

Keywords: Herding; Mutual funds; Asset pricing (search for similar items in EconPapers)
JEL-codes: C32 G12 G23 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443123000306
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:85:y:2023:i:c:s1042443123000306

DOI: 10.1016/j.intfin.2023.101762

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().