The behavior of individual investors can often have a significant impact on market dynamics. One interesting phenomenon that occurs within pooled funds, such as mutual funds and exchange-traded funds (ETFs), is the herding effect among small investors. This behavior can influence investment decisions, asset prices, and overall market stability. In this article, we will delve into the concept of small investor herding effects in pooled funds and explore its implications. Herding occurs when a group of investors, driven by various psychological and behavioral factors, collectively make similar investment decisions. In the context of pooled funds, small investors tend to follow the crowd and make investment choices based on the actions of others rather than conducting independent research or analysis. This behavior can lead to a clustering of investments in specific assets or sectors, creating a herding effect. Several factors contribute to small investor herding effects in pooled funds. One key driver is the desire to mimic the perceived wisdom of larger or more sophisticated investors. Small investors often assume that institutional investors or market experts possess superior information and follow their lead. They believe that