Herd Behavior Of Mutual Funds: Causation And Suggestion

China's security market has a history of over ten years. With the establishment of legal framework, regulatory system, the performance and governance of listed companies have improved a lot. As institutional investors have greater impact on the market, investment becomes more rational and mature, besides traditional technical analysis, study of behavior of finance has emerged in China's market, which could help explain some market noises as Herd Behavior.Through thorough study, we found the Herd Behavior in China's Mutual Fund is stronger than it in America.The Causation of Mutual Funds' Herd Behavior in China is carefully researched in this paper, and suggestions are given from the policy maker's perspective.