Fed paper highlights investor dynamics

02/1/2013 | Reuters

The Federal Reserve posted a research paper online that delves into how investor dynamics affect the corporate-bond market. Researchers say institutional investors tend to exhibit "herd-like" behavior more in the corporate-bond market than in stocks. "We find substantial institutional herding in U.S. corporate bonds, much higher than that previously documented in the equity markets," staff economists Fang Cai, Song Han and Dan Li wrote.

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