Sino-us Securities Operation Of The Fund Is A Comparative Study

The security fund is an important institutional system and financial instrument in modem financial markets which has a great effect on financial system, enterprise system and economic development .In global mutual fund industry, American mutual funds play a leading role. In China, Security funds have developed rapidly in recent years. The shares of security funds have reached 136.2 billion . Security funds held 10 percent of all publicly traded stock shares in China by the year-end 2002.Since security funds play an important role in economy and financial markets, it is very necessary to analyze the operations of security funds completely for the healthy and rapid development of security funds industry. In this dissertation, we establish an overall framework to study comparatively the difference of operations between Chinese security funds and American mutual funds. From the view of comparative study, we analyze the form and organization of funds, the environment (market efficiency and government interference) in which funds operate, the investment strategy, performance evaluation and performance persistence. We conduct theoretic and empiric research and find some major difference of operations between Chinese security funds and American mutual funds. The research will provide some help to Chinese security funds industry.When comparing the developments of funds industry between the two countries, we believe China has great room to develop funds industry. We analyze the difference of institutional factors that affect funds operations. These factors include organization forms, enterprise governance structure, market efficiency and government interference. In USA, security funds are corporate funds and mostly are mutual funds(open-end funds); The governance structure of fund is reasonable; A fund company is the core of the operation of the fund; Security market efficiency is semi-strong; American government rarely interferes in the security market and mutual funds operations. On the other hand, in China, security funds are contract funds; Funds are close-end funds before 2001 and most are open-end funds after 2001; Open-end funds play a main role now; A fund management company is the core of the operation of the fund; The governance structure of fund and fund management company has certain flaws; Security market efficiency is improving; The government often interferes in the security market and mutual funds operations. Institutional factors affect the operations and the performance of security funds.This article then analyze the operations of funds from investment strategy, performance evaluation and performance persistence of funds. We compare index investing, asset allocation, style investing and momentum investing of funds between two countries and find some similarities and difference. In USA, value funds perform better. In early development of security market in china, funds like growth investing, but value funds appear to perform better. With market maturity and good regulations, funds choose value investing more. In USA, the profitability of momentum investing has been agreed generally. In China, the profitability of momentum investing is not as apparent as in USA. But our investors seems to have "disposition effect", over-confidence, over-reaction(under-reaction)too. The basic framework of performance evaluation includes two parts: the evaluation of risk-adjusted returns and factor analysis. We find no apparent evidence to show funds both in China and in USA have stock selectivity ability or market timing ability. In short term, security funds of two countries have performance persistence. The performance persistence of American mutual funds seems stronger. The performance persistence of "losers" of both countries seems stronger too. In shorter term, the performance of funds shows some reversion in both countries.In the end, we point out that we should speed the process of the development of our security market, promote market efficiency and adopt successful experience of other developed count...