Theoretical models on herd behavior predict that under different assumptions, herding can bring prices away (or towards …) fundamentals and reduce (or enhance) market efficiency. In this article, we study the joint effect of herding and momentum at the … industry level. We find that the momentum effect is magnified when there is a low level of investor herding. Herd behavior in …

This paper explores the role mutual fund herding plays on the return comovement in Chinese stocks. The results show … that mutual fund herding significantly reduces the return comovement among Chinese stocks, providing evidence for the … existence of a rational herding behavior by mutual funds. We find that the negative effect of mutual fund herding on return …

In this paper we investigate whether herding by actively managed equity funds affects their performances and flows over … the 1980-2013 period. We show that during the herding quarter, on average, funds that trade with the herd benefit from …

We uncover a negative relation between herding behavior and skill in the mutual fund industry. Our new, dynamic measure … of fund-level herding captures the tendency of fund managers to follow the trades of the institutional crowd. We find … that herding funds underperform their antiherding peers by over 2% per year. Differences in skill drive this performance …

leaders, contemporaneously herding managers, and followers. I find evidence of a persistent group of funds whose trades lead …

This paper studies the added value of intentional style herding for mutual fund managers. We find that herding in … styles is significant and persistent, especially for active funds. We also report that herding tends to increase after … periods of high market volatility, and decrease with sentiment. Furthermore, herding causes temporary mispricing and changes …