Herding behavior in the Swedish Mutual Fund Industry

Sammanfattning: This thesis investigates the tendency to herd by 124 Swedish equity mutual funds over the period of 2000 to 2007. By employing the measure developed by Lakonishok et al. (1992) we find strong evidence of herding in the overall sample. The level of herding by the Swedish mutual funds seem to be higher than for mature markets, but less than for emerging markets. Furthermore, the Swedish mutual funds tend to herd more often when purchasing than when selling a stock, and when trading large stocks. Smaller funds show a higher tendency to herd than larger funds. Comparing our results with previous studies gives further input regarding the maturity of the Swedish capital market.