Investor sentiment and mutual fund stock picking

Timothy K. Chue, G. Mujtaba Mian

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

The active share of mutual funds drops significantly when investor sentiment is high, indicating that fund managers reduce their active stock selection and stay closer to their benchmarks during such periods. Our evidence is consistent with fund managers being sentiment-prone–challenging the conventional view that it is only the preponderance of retail investors during high sentiment periods that allows sentiment to influence asset prices.

Original languageEnglish
Pages (from-to)1620-1625
Number of pages6
JournalApplied Economics Letters
Volume29
Issue number17
DOIs
Publication statusPublished - Oct 2022

Keywords

  • active share
  • investor sentiment
  • Mutual fund
  • stock picking
  • stock return

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Investor sentiment and mutual fund stock picking'. Together they form a unique fingerprint.

Cite this