On the Style-Based Feedback Trading of Mutual Fund Managers

B Frijns*, A Gilbert, RCJ Zwinkels

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


This paper examines the style-based feedback trading behavior of U.S. mutual fund managers. We provide an empirical version of Barberis and Shleifer’s style-switching model. We find style-based feedback trading for 77% of the funds, half of which is positive (negative) feedback trading. There is evidence for “twin style” switching, where capital is channeled between value and growth, and between large- and small-cap. Growth (value) funds apply more positive (negative) feedback trading. Funds that switch more aggressively are younger and have higher expense ratios. Finally, we find that positive (negative) feedback trading yields positive (negative) alpha.
Original languageEnglish
Pages (from-to)771-800
Number of pages30
JournalJournal of Financial and Quantitative Analysis
Issue number3
Publication statusPublished - Jun 2016
Externally publishedYes


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