Fund Executive Team Research, Fund Performance

This paper combines the theory of TMT(Top Management Team) with the theory of mutual fund evaluation,adopting the methodology both case study and empirical study,examing and analyzing the correlation between the TMTBC (Background Characteristics of TMT) of mutual fund in China,try to answer these questions as following:(1) What's the whole BC and structure of mutual fund TMT in China?(2) What's the correlation between TMTBC and fund performance in China?(3) Does the particularity exist in the correlation between the social capital variable of TMTBC and fund performance under the TEs(Transition Economics) circumstance in China ?(4) How to evaluate the phenomena both fund manager replacement and fund manager stars?The paper starts from the Upper Echelons Theory of Hambrick(1984),which building the TMT theory and propositions,combining the latest research progress of the correlation of TMTBC and company performance,having developed a series of hypotheses of TMTBC influence on fund performance.We exam the sample which include growth of net asset value and SHARP value of 173 domestic-equity mutual funds from 43 fund companies over the 2005 to 2007 period to measure the influence of the TMTBC on fund performance.Using the statistics software of SPSS, STATA and SASS,we conduct a series of multi-regression of correlation of TMTBC and fund performance:First,we separate the fund TMT into three levels,such as board,investment committee and fund manger team,and the correlation of each level BC and fund performance is tested.Secondly,from the social capital dimension,we extract some TMTBC variables into four varieties,such as GEB (Government experience background),GEB(Graduated college background),IEB(International experience background) and FEB(Financial experience background),and test their correlation with fund performance.Thirdly,from the fund governance dimension,we exam the correlation of fund board BC and fund manager replacement.Finally we discuss the TMTBC of a typical fund company by case study,and specially focus on the phenomena of fund manager stars in China. The empirical results find that TMTBC is significant correlating with fund performance as a whole.From the social capital dimension of TMTBC,FEB (Financial experience background) variable is significantly positive correlating with fund performance,but GEB(Government experience background) is significantly negative correlating with fund performance.Our finding shows that IDR(Independent director ratio) and FEB(Financial experience background) from BC of fund board in China are significantly positive correlating with fund managers replacement.This indicates that the independent Rules for better fund governance is partly efficient in China.In addition,the case study find that the phenomena of fund manager stars is reasonable at present in China,and still permanent in coming future.The purpose of this paper is to exam the correlation between TMTBC and fund performance by using the latest data from Chinese mutual funds.So the innovation from this paper may can be implement as following:Firstly,trying to open the "black box"during TMT operating process;Secondly, as exploratory work,this paper extract some social capital variables from TMTBC and test their correlation with mutual fund performance;Thirdly,examing the director background characteristics' correlation with fund managers turnover from the fund governance dimension,and also analyzing the fund manager star phenomena;Finally,making a suggestion on how to set up an excellent top management team of mutual fund in China.