Business Faculty Publications
Document Type
Article
Publication Date
3-1-2015
Publication Title
Journal of Banking and Finance
Keywords
herding, industry momentum, mutual funds
Disciplines
Business | Finance and Financial Management
Abstract
This study examines whether mutual funds herd in industries and the extent to which such herding impacts industry valuations. Using two herding measures proposed by Lakonishok et al. (1992) and Sias (2004) we document that mutual funds herd in industries. We show that industry herding is not driven by fund flows and that it is not a manifestation of individual stock herding. We also find evidence indicating that herding in industries by mutual funds is related to the industry momentum phenomenon first documented by Moskowitz and Grinblatt (1999), but it does not drive industry valuations away from their fundamentals.
Recommended Citation
Celiker, Umut; Chowdhury, Jaideep; and Sonaer, Sokhan, "Do Mutual Funds Herd in Industries?" (2015). Business Faculty Publications. 256.
https://engagedscholarship.csuohio.edu/bus_facpub/256
DOI
10.1016/j.jbankfin.2014.11.006
Version
Postprint
Publisher's Statement
NOTICE: this is the author’s version of a work that was accepted for publication in the Journal of Banking and Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in the Journal of Banking and Finance, 52, 03-01-2015; 10.1016/j.jbankfin.2014.11.006
Volume
52
