Chinese Securities Investment Fund Performance And Its Economic Effects Study

Securities investment funds have been growing by leaps and bounds in the recent 10 years. From the first exclusive fund, issued in 1998, to the year of 2001, the exclusive funds have risen to 81.7 billion shares. That was the first leap. After that, under the guide of investors from unconventional institutes, the first open fund was issued in 2001, which was the beginning of the second leap. Up to early 2005, the overall number of open funds is 325.7 billion shares. The growing of securities investment funds not only gives birth to an army of investors, but also offers new types of securities to the market. However, study of securities investment funds in China is still lagging behind, and research of fund's performance and economic effects is especially short of depth and macro insight. It is the roaring practice and the dated research that motivates this thesis.The question of fund's performance and economic effects is both theoretically and practically significant. This thesis employs the methods of comparison and exemplification mainly, involving international comparison, statistic analysis and diachronic discussion. Among them, descriptive statistic, regressive analysis, correlative analysis and statistic inspection are used frequently. As for the analytic tools, the calculation of fund's performance is aided by EXCEL of MICROSOFT, other data based on SPSS.This thesis follows the general steps of exemplification. The first part analyzes the significance of the topic and defines the concerned concepts. The following part looks back into the history of the international securities funds and some related theories. Through reviewing securities investment funds of developed countries, the general rules are sought out. Review of some assessment theories leads to the generalization of some useful methods. Reviewing the securities investment fund's economic effects of developed countries is summarized in their general appearance and their correlation with economy, finance and securities market. Main purpose of the second part is to prepare the following demonstrative study. The third part of the thesis investigates the history and path of Chinese securities investment funds. In order to discuss Chinese securities investment fund performance and economic effects, it is necessary to make clear about the background of its birth and the path of its development. This part alsocompares the existing securities organizations in China. According to the Trust-deputy theory, through analyzing the correlation of different organizations, the structural and systematical elements that influence are discussed briefly. Study of the historical and systematical elements is aiming to seek the deeper reasons that influence Chinese fund's performance and economical effects. The forth part demonstrates Chinese securities investment funds with data of securities investment funds and various economic and financial numbers. It also compares the speculative benefits and operations of different securities funds in different phases. Such horizontal and vertical comparison allows for a complete judge of Chinese securities investment fund's performance. Study of the economic effects is based on a regressive analysis of some economic and financial indexes. Based on the historical background of Chinese securities investment funds, the mutual influence of fund's scale and these elements is found out, thus the deep nature of economical effects shows itself. On the basis of demonstrating data, this part ends in a decisive conclusion about Chinese securities investment fund's performance and its economic effects. Following the above study, some suggestions are raised in the final part, with regard to the healthy and secure growth of Chinese securities funds.About the characteristics of Chinese investment securities funds, this thesis, based on convincing demonstration, comes to such conclusions as follows:First, generally, the funds have the capacity of conquering market. Specifically, they tend to capture a bear or depressing market more easily than a bull one. Second, the modulus of combined funds is obviously less than one, which shows the strategy adopted by investors is mainly defensive. Fluctuation of their dividends is milder than that of the market index, therefore their risk is smaller than the latter.Third, the open funds are better than the exclusive ones, in both bringing extra dividends and controlling risks.Fourth, different types of funds perform differently, i.e., those close to stocks contain bigger risks and benefits, those close to bonds smaller. However, stock-debt balanced funds show no difference from stock funds.Fifth, development of the state economy lifts income of the residents, which in turn contributes to the abundant wealth in society. So the market is well prepared for issuing of securities funds. This relation is simplified in the economic chain: GDP—income level of residents—deposit level—scale of funds.Sixth, the current development of securities funds benefits from the growing scale of our country's deposit, on the other hand, it hastens the transfer and new operations ofother financial organizations. The appearance of investment funds positively promotes the growing of banks and securities, insurance, trust and financial companies. Seventh, generally speaking, Chinese securities investment funds, which are developed under special policy, suit to and accelerate the development of securities market. In terms of structure, there are fewer high quality listed corporations in market, in contrast to the vigorous securities funds. The lack of risk-avoiding tools may hinder the healthy expanding of these funds.Eighth, with the steady progress of securities investment funds, and the perfection of market supervision and regulations concerned, such funds will positively affect management of listed companies.Innovation in this thesis includes:First, different from most other arguments in study of this topic, this thesis argues that our country's funds show the capacity of conquering market, and perceives that they are generally successful in controlling risks. It also brings forth the conclusion that these funds tend to capture a bear or depressing market more easily than a bull one.Second, in this study of Chinese securities investment funds performance, not only the matching of risks and dividends is analyzed, but the market is divided into three stages, namely, rising—falling—balance. Through observing their different features in each stage, the thesis probes into the way funds conquering market, then analyzes how funds avoid risks and absorb dividends objectively. It is not a mere comparison to the market.Third, according to current evidences, securities investment funds in China cannot divide deposits directly, which is different from the international common rule. This is partly because of the saving habit of Chinese residents and other economic elements in a mould-transferring society. However, with the gradual progress of the national economic situation, the common rule will work in China.Fourth, new ideas about the category of privately raised funds are given here. Mutual Share of risks and dividends is considered as the basic criterion to divide privately raised funds and formal financing. To exclude such financing behaviors as studio and entrusted financing from privately raised funds, is not only good for a deeper theoretical study, but for the made of laws and regulations, and for the healthy development of privately raised funds.Fifth, with view to the actual situation of Chinese securities market, this thesis offers systematical proposals to the development of our country's securities investmentfunds, including built of market and funds supervisory company, ruling structure, supervision over privately raised funds, etc.Given the short history, heavy influence of the mould-transferring economy and the policy-guided development of our country's securities market, pure fixed demonstrated study cannot reveal the panorama of Chinese securities investment fund's performance and economic effects. In addition, historical data are comparatively deficient for its short history, which is a great pity during the study. Such are aspects demanding further research in future.