Does fund manager herding vary over the business cycle?

This article aims to explore whether business cycle has any bearing on herding by fund mangers. Using the sample of open-end mutual funds in Taiwan from January 2003 to February 2007, the main results are as follows. First, excluding the impact of business indicator, herd behaviours for balanced and growth fund managers are more significant than growth-income and aggressive-growth ones. Next, the business indicator has significantly negative influence on the herding for balanced and growth fund managers. Finally, without considering the impact of business indicator, there are no significant differences of the herding among various types of fund managers.