Herding behaviour in Spanish global funds' country allocations

Ortiz, Cristina; Sarto, José Luis; Vicente, Luis

doi:10.1080/02102412.2013.10779740

Cited by 5 publications

(6 citation statements)

References 13 publications

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“…These results, contrary to our expectations, do not show more herding behavior in management groups, being similar to funds herding. A similar result is found by Ortiz et al (2013), who report more herding among the funds of a family than among families in Spanish global funds.…”

Section: Resultssupporting

confidence: 86%

“…Comparing panel D with Table 6, the timing abilities are similar; nevertheless, the percentages of groups that time correctly the size and momentum (market and book-to-market) are higher (lower) than in funds. This may be related to the assets of the management group, as Ortiz et al (2013) find in Spanish global funds. In our sample, Ibercaja, Caja Rural, and Sabadell Bank present market timing.…”

Section: Herding Of Management Groupsmentioning

confidence: 93%

“…Larger funds have more management resources to anticipate others, acting as leaders, while smaller funds tend to act as followers. In Spanish global mutual funds, Ortiz et al (2013) find that this phenomenon is driven by fund families, rather than by individual funds.…”

Section: Datamentioning

confidence: 99%

“…Moreover, we find no clear evidence that followers are smaller groups and leaders are larger groups, contrary to prior mutual fund results. Ortiz et al (2013) find that small (large) groups have more incentives to act as followers (leaders) because the group size may be a constraint with respect to the capacity to evaluate large amounts of data, produce economies of scale, or afford better financial analysis.…”

Section: Herding Of Management Groupsmentioning

confidence: 99%

“…When herding exists, the linked phenomenon of informational cascades may appear. While herding is a convergence of behavior, where managers simultaneously trade the same stock (Ortiz et al , 2013), informational cascades emerge when investors consciously act together, following each other into (or out of) the same securities over certain periods, rather than relying on their own information. In informational cascades, certain individuals present leadership behavior (individuals who anticipate the movements of others), and others develop as followers (individuals following leaders).…”

Section: Introductionmentioning

confidence: 99%

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Do the most skillful managers herd?

Alda

2017

Journal of Pension Economics and Finance

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This paper analyzes whether herding and skillful managers may coexist. When herding appears, managers tend to present poor timing abilities; however, a weak herding level (a result commonly found in pension funds) may evidence a mixed scenario, where some managers develop skills, and others follow the herd. Additionally, when informational cascades emerge, some managers may act as leaders, anticipating others’ movements. Nonetheless, this anticipatory skill does not mean that leaders also anticipate market movements and present timing skills. Our results show herding and inter-temporal herding in a sample of Spanish pension funds, though the imitation behavior is not strong. We also find evidence of a mixed scenario, in which some non-herding managers present timing skills, while herding funds are not able to develop these abilities. Finally, we find successful timing for certain leaders, showing that the anticipation of others’ movements does not show real timing abilities.

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Section: Resultssupporting

confidence: 86%

Section: Herding Of Management Groupsmentioning

confidence: 93%

Section: Datamentioning

confidence: 99%

Section: Herding Of Management Groupsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Do the most skillful managers herd?

Alda

2017

Journal of Pension Economics and Finance

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Efecto manada en sectores económicos de las bolsas latinoamericanas: una visión pre y poscrisis subprime

Duarte¹,

Carreño²,

Suárez³

2016

Contaduría y Administración

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Impact of education, age and gender on investor's sentiment: A survey of practitioners

Gonzalez-Igual

Santamaría

Vieites

2021

Heliyon

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The field of behavioral finance lacks a homogeneous and structured theoretical framework. The purpose of this paper is to contribute to further systematization in the field by analyzing the impacts of education, gender and age on investor behavior and sentiment. The study is based on online anonymous surveys given to 106 professional investors active in the Spanish market during February 2017. The survey includes control questions, seven questions regarding investors' sentiment to elaborate a confidence index and twenty questions concerning the practitioner's view of behavioral finance. We first identify a gap between the relevance of behavioral finance and the lack of education in the field. We also find a clear misalignment between the investors and their clients' profiles related to their level of confidence. In that regard, the use of the institutional investor confidence index mitigates self-perception bias and is a key element in determining investors’ real profiles. Consistent with prior research, we find that female investors view themselves as more driven by rational analysis and are more risk averse while younger investors are more influenced by cognitive and emotional biases. As a key contribution, we establish a model to determine investors’ sentiment, which shows that female and more experienced practitioners exhibit higher levels of optimism and confidence.

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Herding behaviour in Spanish global funds' country allocations

Cited by 5 publications

References 13 publications

Do the most skillful managers herd?

Do the most skillful managers herd?

Efecto manada en sectores económicos de las bolsas latinoamericanas: una visión pre y poscrisis subprime

Impact of education, age and gender on investor's sentiment: A survey of practitioners

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