Research On The Investment Style And Adjusted Performance Of Chinese Security Funds

Since the execution of "temporary method of administrating security funds" in 1997.11, our security funds had got rapid development, and the theories and practical researches of performance evaluation had also got much more attention than before. The development of security industry is much related with the performance evaluation. Scientific security performance evaluation can make the capital flow into excellent funds which had a good performance, and make well-performed managers stay instead of others. According to a powerful research, in 1995, 97 percentage of the capital was managed by several 4-stra or 5-star mutual funds which were evaluated by Morningstar company, but some mutual funds below 3-star were abandoned by investors step by step. So it is very important for us to evaluate security funds. Along with the increase of variety and number of security funds, many fund managers intend to select some special investment style, especially in developed market some professional funds which has different investment styles. Under these circumstances, some unexpected problems occurred. Firstly, some fund managers don't practice what they promised. These managers violate the investment style which they promised in "Recruiting illustration fact", and this makes investors not sure the investment style of fund they selected. Secondly, it becomes harder for us to evaluate the performance of fund. The selected stocks by fund managers have a very different return with the market index. If the return of fund come from all this type of stocks getting better, so it would be irrational for us to evaluate this fund according to the market index, we must adjust the return in accordance with style index. So, the identification of investment style of fund is becoming more important, and adjusted performance by investment style will better evaluate these types of funds.Chapter one introduces the researching background, the meaning of selecting title, the research methods and basic conclusions. Chapter two gives a detailed introduction of investment style adjusted performance, and defines the relative concept in the paper. Chapter three tests the performance of Chinese security fund, on the basis of Gruber model, we tests the investment style and adjusted performance. Chapter four draws some conclusions and gives some possible suggestions for further improvement of security fund.The conclusion of this paper consists of: (1) some fund managers violate what they promised before, they actually change the investment style. (2)Most funds invest...