Risk Management, Rational Herding and Institutional Investors: A Macro View

Torben Lütje and Lukas Menkhoff

A chapter in Risk Management, 2005, pp 785-799 from Springer

Abstract: Abstract As institutional investors are engaged to realize attractive risk-adjusted returns, they can by definition be seen as risk managers. This paper analyzes their risk management behavior from a macro perspective and focuses on their incentives for rational herding. Based on a questionnaire survey we find clear evidence of herding among fund managers in Germany. While all different subgroups of fund managers perceive institutional herding, senior fund managers perceive herding even more strongly than more junior managers. Regarding herding as rational strategy of adapting to incentives, one might ascribe this finding to the higher pressure of success that senior managers face.

Keywords: Institutional Investors; Herd Behavior; Momentum Strategy (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Risk Management, Rational Herding and Institutional Investors: A Macro View (2003)
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:spr:sprchp:978-3-540-26993-9_40

Ordering information: This item can be ordered from
http://www.springer.com/9783540269939

DOI: 10.1007/3-540-26993-2_40

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().