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Benefits from social trading? Empirical evidence for certificates on wikifolios

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  • Oehler, Andreas
  • Horn, Matthias
  • Wendt, Stefan

Abstract

Social trading describes the idea that signal providers make their investment decisions available to other investors who follow them. The performance of social trading has hardly been in the focus of research so far. We analyze the performance of 1084 wikifolio certificates used in social trading and issued in 2012 and 2013. We apply factor models to analyze these certificates' returns and alphas relative to benchmark indexes. We find that, on average, wikifolios do not outperform the market. However, wikifolios with geographical focus provide better performance than those without. Furthermore, the best performing wikifolios earn significant short-term excess returns.

Suggested Citation

  • Oehler, Andreas & Horn, Matthias & Wendt, Stefan, 2016. "Benefits from social trading? Empirical evidence for certificates on wikifolios," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 202-210.
  • Handle: RePEc:eee:finana:v:46:y:2016:i:c:p:202-210
    DOI: 10.1016/j.irfa.2016.05.007
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:finlet:v:28:y:2019:i:c:p:171-179 is not listed on IDEAS
    2. repec:kap:jcopol:v:40:y:2017:i:2:d:10.1007_s10603-016-9337-5 is not listed on IDEAS
    3. repec:eee:quaeco:v:70:y:2018:i:c:p:160-171 is not listed on IDEAS
    4. repec:eee:jbrese:v:89:y:2018:i:c:p:322-327 is not listed on IDEAS
    5. repec:eee:jbrese:v:97:y:2019:i:c:p:184-197 is not listed on IDEAS

    More about this item

    Keywords

    Social trading; Social investing; Retail investors; Wikifolios; Herd behavior;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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