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- Title
Mutual fund herding and reputational concerns.
- Authors
Popescu, Marius; Xu, Zhaojin
- Abstract
The article examines whether mutual fund managers’ career concerns contribute to their herding behavior. We find that mutual funds herd, on average, 71% more in down markets than in up markets. Furthermore, we find that poorly performing funds herd, on average, 17% more than well performing funds, and that this pattern is the result of poorly performing funds that herd, on average, 110% more in down markets relative to up markets. Our evidence is consistent with the argument that poorly performing managers have stronger career concerns, and particularly so in down markets.
- Subjects
MUTUAL fund managers; MUTUAL funds; INVESTMENT policy; INSTITUTIONAL investors; STOCKS (Finance); ATTITUDE (Psychology)
- Publication
Journal of Economics & Finance, 2018, Vol 42, Issue 3, p550
- ISSN
1055-0925
- Publication type
Article
- DOI
10.1007/s12197-017-9405-y