The Research On The Behavior Of Equity Open-ended Funds In High-clustering Stock In A Stock Market

The Effect of Sheep Flock is that people are often influenced by themajority, then following their thought and behaviors. This phenomenon isalso known as “HERD EFFECT”. Individual would accept some specificthought or follow some specific behaviors without judging by himself ifthose specific thought and specific behaviors had already been doing bythe majority. The effect was first applied to the stock market as aterminology which means that investors copying others investmentstrategy cause in a certain period of time the market would buy or sale thesame specific stock.Herding effect research, as a key field of behavioral finance research,combining a lot of frontier research of psychologics Human Ethologicssuccessfully explains certain market anomalies.This paper aims at digging the “HERDING EFFECT” existing in the high clustering stocks. We discussed the current situation of Chinesesecurities market and explained the anomalies existing in Chinesesecurities market based on the behavioral finance theory.I also provide some Policy and suggestion accordingly.