Study On Performance Appraisal Of Security Investment Funds

With the innovation of financial technology, market and regime in each passing day and the decrease of production expense and opportunity cost, investment funds industry of high efficiency is developing rapidly. It has become the main force flourishing and stabilizing the financial market compared with other financial industries. In China investment funds industry has also grown up in fairly high speed with the support of all-favorable funds policies, after the fundament of the first security investment fund. The continuous expand of the quantity and scale of investment funds makes it that funds prompt the stable development of domestic security market; provide a new investment channel for ordinary investors as well. In the procession of rapid development of investment funds, it is urgent to launch performance appraisal in our country, and accurate appraisal and compare the performance of different fund will do benefits to the investors and lead them to choose appropriate fund. On the aspect of performance appraisal, western countries has accumulated abundant research outcomes, among which the most famous methods are Treynor Index, Sharpe Index and Jensen Index based on the asset portfolio theorem and capital and asset pricing model. However, since the security investment funds established and developed not long ago, there isn't a perfect system of performance appraisal in our country up to now, and net asset value and returning ratio of funds are applied to appraise the performance. In order to appraise and evaluate the funds performance objectively and impartially in our country, this essay analyses the adapting of the widespread single-index models and multi-factors model in our country, after summarizing the main appraising methods in western countries and inspecting the present situation of domestic investment funds development and performance appraisal. Then the article probes into a framework of appraising the present funds performance, and makes use of it to evaluate the sample funds and draw some according conclusions. On the base of the above empirical research and analysis, a few suggestions are put forward to improve the development of internal security market and investment funds. There are three parts in the whole article.Part One: General issues of performance appraisal of security investment fundsIn this part the author first elaborate the necessity of performance appraisal. The performance of funds portfolio embodies its investing value as a financial tool, which is hopefully understood by comprehensive investors and funds administers. By obtaining the information of investing performance, investors can make a choice whether to invest in funds and which kind of fund to invest if possible; while a funds administer can compare with others and explore his weakness, thus to promote the complete of different funds. Moreover, performance appraisal is very essential for the macro administering institution to practice effective supervisement and administration, and has its unique real meaning for our security market on the phase of weak form of the efficient market. In this part, the author defines the meaning and content of performance appraisal after analyzing and looking deep into the four factors influencing funds performance.Part Two: Research on performance appraisal methods of security investment fundsThis part is the key chapter of the whole article, including three issues. In the beginning, the main appraisal methods are summarized in western countries, which are Treynor Index, Sharpe Index and Jensen Index based on capital and asset pricing model and multi-factors model. And the difference and sameness, advantage and disadvantage of the three single-index models are discussed generally; while the strong points and weak points between the single-index model and multi-factors model are also analyzed. There is plenty of research outcomes accumulated in the development of performance appraisal methods in western countries. However, every model isn't perfect, and each has its weak...