Study Of Chinese Securities Investment Funds' Impacting On The Stability Of The Stock Market

It is securities investment funds' primary aim to help stock market to develop healthily and stably.Whether Chinese securities investment funds have done that is what this paper try to make sure.First,we expatiate the relationship between securities funds and stock market's stability on theory,based on this we study Chinese securities funds' influence on the stock market from two aspects:fund ownership of shares and herd behavior .From studying fund ownership of shares we find that it correlates with market fluctuation positively.With the development and maturity of investment funds,propotion of fund ownership of shares will drop down,funds' action will do more impact on stock market.Funds like to change their portfolio holdings continually,and prefer to speculate.What funds do aggravates stock market's fluctuation.The study measures herd behavior from herding(LSV model) and excessive demand and gets different conclusions.Herding indicates that there is obvious herd behavior in Chinese stock market,which aggravates fluctuation.Excessive demand don't think funds' herd behavior does impact on stock-price.On the contrary,it stablize the fluctuation of stock price. Different object the study chooses results in the different conclusion,the former one is more universal but the latter one focuses on the valuable stocks that most funds like investing.The study shows that funds still haven't been efficient for stabilizing the stock market.Based on the study above we give some suggestions and advices.