The Application Of Portfolio Theory In Equity Mutual Fund And Verification

Fund has developed for more than half a century since its originated from England in 1868. With the emerging of the first mutual fund of jintai fund in March. 1998, our fund market has developed fast with the sustaining policies for funds. The equity mutual fund as a financial tool for investors to seek for high returns and the safety of capital, its development needs a scientific and effective system of funds portfolio investment imminently. Considering the actuality of application of portfolio theory of equity mutual fund in our country, this paper discusses the applicability of portfolio theory and vertifies the effect of these theories.At the beginning, this paper introduces the chief constitutes of portfolio theory. With studying the hypothesis that the theory based, it discusses some issues that constrain the application of portfolio theory, shows the development process of equity mutual fund, points out some problems existing in the field of application of portfolio theory, and analyses the reason that lead to this circumstance. In this chapter, some experience from foreign countries has been compared and learned to improve the investment and development of china. In the fourth chapter, the application effect of portfolio theory has been verified, the result shows that these portfolio models don't have evident advantage. When considering sell short constraint, single index model shows better afterwards return rate and can be looked as an important2reference by equity mutual fund. In this part, multi-object programming is used to set up portfolio model and obtain preferable effect. However, there still some problems such as complex calculation etc need further research. In the last chapter of this paper, it points out some advices of developing equity mutual fund and perfect the application of portfolio theory in China currently.