The Study On The Investment Of Financial Derivatives Instrument And The Performance Of Institutional Investors

Financial derivatives instrument market has developed into a mature and indispensable market around the world. It has significant impact on the global financial markets. Financial innovation and financial liberalization have speeded up the integration process of the global financial system. China has been affected by international economic environment more and more. Facing to the global financial crisis, institutional investors in China are crying out for financial derivatives instrument to reduce investment risk. The study of financial derivatives instrument theory and application exists a rather big gap between china and developed countries and regions. Under this background, the study of financial derivatives instrument has become absolutely necessary in China.First, we studied the effects of financial derivatives instrument in theory for institutional investors, and tested the effects of financial derivatives instrument for institutional investors with Chinese data by nonparametric statistics methods. Second, we designed investment strategy about financial derivatives instrument. In order to guide institutional investors'learning, the application of investment strategy is discussed through a case study. Finally, we gave some good advices. The article attempts to further enrich the scientific results of the financial derivatives instrument theory. We explored some investment strategies for serving China's institutional investors needs.Through the research, we hope (1) to answer the question why financial derivatives instrument does not always improve the performance of institutional investors, (2) to resolve the problems China's institutional investors how to make use of financial derivatives instrument, (3) to know the influences on the performance of institutional investors by financial derivatives instrument, (4) to know foreign institutional investors how to use financial derivatives instrument.The full text was divided into four parts and seven chapters. The first part was Chapter I: Introduction. This chapter described the background of study and practical significance, introduced the major contents of the study, gave a general review on the recent research development of financial derivatives instrument in China and abroad. The second part includes contents from Chapters II to Chapter IV. This part focused on the research of the impact of financial derivatives instrument on the performance of institutional investors. In addition, we also explored the value of financial derivatives instrument. The third part includes contents from Chapter V to Chapter VI. This part focused on the research of the investment strategy of financial derivatives instrument. And we gave an examples of the Chinese stock index futures. The fourth part was Chapter VII, which is the conclusions of the study and relevant proposals.Chapter II is the theoretical analysis on the impact of financial derivatives instrument on institutional investors. We studied the effects of the main mechanism of financial derivatives instrument. First we defined the relevant concepts. Second, we analyzed the characteristics of financial derivatives instrument. Third, we relaxed the premise of the theory of CAPM model, and built the theoretical framework of the impact of financial derivatives instrument on institutional investors. The results showed that the performance of financial derivatives instrument holders was not necessarily better than the performance of financial derivatives instrument non-holders. Finally we explained the common interpretation of phenomena about financial derivatives instrument.Chapter III is nonparametric statistics on the effect of financial derivatives instrument on institutional investors with Chinese data. We tested the effects of financial derivatives instrument on chinese institutional investors. First, we have proposed the research hypothesis based on the analysis of investment theory, and then we had sample design. Finally, we analyzed the empirical results. The results showed that the performance of financial derivatives instrument holders was not necessarily better than the performance of financial derivatives instrument non-holders.Chapter IV is analysis of the value of financial derivatives instrument. The results showed that Financial derivatives instrument can reduce the cost of bankruptcy, the cost of investment Crisis, the tax expenditure, and the risk of a major shareholder. It also can ensure the safety of capital and create value for institutional investors Indirectly. Chapter V is the investment strategy of financial derivatives instrument. We proposed the Chinese institutional investors how to make use of financial derivatives instrument . Then, we have suggested that institutional investors can use financial derivatives instrument to arbitrage, financial derivatives instrument to risk management, financial derivatives instrument to asset allocation, and financial derivatives instrument to product design of funds.Chapter VI is the arbitrage strategy of the Chinese stock index futures. we gave an examples of the Chinese stock index futures. The study concluded that as a alternative for spot goods portfolio, close-endfunds portfolio is the best strategy. In addition, influential factor of arbitrage risk factors were analyzed in the chapter.Chapter VII is the results of the article and some advices. We put forward some relevant proposals in this chapter. We proposed to develop China's financial derivatives instrument market, to research vigorously, and to set about preparing to over-the-counter derivatives market. We proposed to improve the market mechanism and system, derivatives risk assessment and control mechanisms. Then, we proposed relevant regulatory authorities to control the risk of financial derivatives instrument by limiting to the ratio of financial leverage, and so on.The main innovation of this article are as follows:First, this paper built the theoretical framework of the impact of financial derivatives instrument on institutional investors, according to the Markowitz Portfolio Selection Theory and the Sharp's capital asset pricing model (CAPM). This paper put forward the investment-income uncertainty theory. The investment-income uncertainty theory is different from Traditional theory. It gives a explanation of the impact of performance of financial derivatives instrument on investment from a new perspective. Such research is still rare.Second, this article tested the effects of performance of financial derivatives instrument on chinese institutional investors with nonparametric statistics methods. The results showed that the performance of financial derivatives instrument holders was not necessarily better than the performance of financial derivatives instrument non-holders. Such research is still rare in china.Third, this article put forward the close-end funds portfolio arbitrage strategy of the Chinese stock index futures with chinese data in the world. This article draw a lot of very valuable conclusions. We believe that as a alternative for spot goods portfolio, close-end funds portfolio is the best strategy, and so on. The conclusions of the study is very important to China's institutional investors and is undoubtedly of great significance.Fourth, this article has systematically researched the investment strategy of financial derivatives instrument from the perspective of institutional investors. Such research is still rare. The study about the use of financial derivative instruments are mostly from the perspective of traders at the present time. Moreover, we put forward creatively some very valuable strategy which operability. Such research is still rare. Therefore, this study has realistic significance.