Research On Market Segmentation Of Investment Fund In China

After more than a hundred years of development, the security investmentfund has achieved tremendous progress in terms of both scale and products.It has become one of three pillars of the financial system, in addition to bankand insurance. Such change in the international finance structure has beeninspiring for China's financial sector development and reform.Understanding the trend of the financial structure development, and giving acomprehensive and theoretical analysis of the market segmentation of thesecurity investment fund products will be of historical significance. China'ssecurity investment fund is lagging behind the developed market in scale,product diversity, and maturity. Faced with potential competition from theleading foreign security funds, we need to analyze the market and furtherdesign differentiated products in order to develop China's fund sector.This paper has 5 sections. Section one discussed the concept of investmentfund, reviewed the development of China's investment fund and its currentproblems, explored the importance and the urgent needs to analyze thesegmentation of China's investment fund market. Section two reviewed thedevelopment of the investment fund in overseas market, the products ofChinese and foreign investment fund, and the trend of the marketsegmentation. Section three gave a full account of China's securityinvestment fund market and its characteristics, and analyzed prevailingproblems of China's investment fund market, such as the unbalanceddevelopment, duplication of products, lack of low risk and differentiatedproducts, and ambiguous market identification. Section four discussed thefour factors hindering the development of China's investment fund marketsegmentation: immature target market, imperfect legal framework, lowaverage income, and investors' weak trust and low confidence in the market.Section five offered suggestions to the investment fund market segmentation,and elaborated the necessity and feasibility of such suggestions, including:(1) investment fund companies should have a clear target for its products;(2)investment fund companies should grasp the opportunity to develop newproducts;(3) improve the investment climate of the target market;(4)improve the legal environment;(5) cultivate a sense of long term investment;(6) improve the quality of investment fund companies.The author used an approach combining example study and theoreticalresearch, qualitative and quantitative analysis, and took historical and factualperspectives to compare the segmentation of international investment fundmarkets. The author made in-depth analysis of the facts, characteristics, andproblems of the segmentation of China's investment fund market, as well asthe impediments of its development. The paper finally made suggestionsincluding identifying accurate target market and developing new products byfund companies, perfecting market and legal environment by regulatoryauthorities, and educating the investors for long term investment, andimproving the quality of fund companies.