| Summary: | 碩士 === 銘傳大學 === 財務金融學系碩士班 === 100 === This paper first extends Sias(2004) to examine whether UK fund managers are engaged in the herding behaviors in the stock market, what are their herding reasons, whether their herding behaviors are different in the bullish and bearish periods and whether their herding behaviors are informational or not. Our results demonstrate that UK fund managers’ cascades mainly result from their herding and their herding is not primarily driven by habit investing. Different from the results of Sias(2004) and Wylie (2005), we find that momentum trading can be regarded as one of the main reasons of UK fund managers’ herding. They are more likely to herd in large capitalization securities, so their herding may result from investigative herding, contrary to the finding of Sias(2004). Moreover, our results find that fund managers’ cascades mainly resulting from their herding does not change in the bullish and bearish stock markets. We also find the growth-type funds are more likely to herd with their different types. In addition, we confirm that there are weak positive correlations between the fraction of fund managers buying and subsequent stock returns, consistent with the results of Wermers(1999), Choe et al.(1999) and Sias(2004). According to the argument of Hung et al.(2010), their herding behaviors belong to informational herding within the following year. In order to improve portfolio performance, other investors could follow UK fund managers to purchases stocks overbought by them with at least 15 traders quarterly in the following one year especially for the funds of growth, specific sector and international.
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