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Mutual fund herding and delisting risk: Evidence from China

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  • Song, Qinhao
  • Yang, Lu
  • Jiang, Yuxiang

Abstract

Using a novel, dynamic measure of fund-level herding that captures how fund managers mimic institutional trading decisions, we analyze 3490 mutual funds in China over 21 years (2003–2023). We find that higher herding tendencies significantly increase delisting risk. Herding is also linked to shorter fund lifespans, smaller asset bases, and higher portfolio manager turnover. These results remain robust after extensive tests addressing endogeneity. Overall, our study shows that herding meaningfully heightens operational risks for mutual funds.

Suggested Citation

  • Song, Qinhao & Yang, Lu & Jiang, Yuxiang, 2025. "Mutual fund herding and delisting risk: Evidence from China," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013558
    DOI: 10.1016/j.frl.2025.108098
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    References listed on IDEAS

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