A Study On The Relationship Between Chinese Fund Management Companies' Shareholder Structures And Fund Performances

The securities investment funds have been one of the most important kinds of investors on China's securities markets. To some extent, its development improves the unreasonable structure of China's stock market and promoted the innovation on relative regulations. But now Chinese funds are not that satisfying for the investors. Many problems arise with its booming. In current system, the fund management companies are in the core of the system. They control the assets and are authorized to decide when and what securities to buy and sell. As an important part of corporate governance structure, the fund management companies' shareholder structures have a close tie with the funds' management efficiency and performances, and have a great effect on various aspects of the corporation governance mechanism. Only with an appropriate shareholder structure can a fund form a good corporate governance structure and achieve a good performance.Most of the domestic and foreign research papers about the securities investment funds' management are about the company-type funds and focus on the effects of the corporate governance structures, especially the structure of the board, on the funds' performances. Few of them are on the effects of the shareholder structures. This paper firstly analyzes different shareholder structure models and their characteristics. Then, the author presents the evolution of Chinese fund management companies' shareholder structures and the led-to differences of behaviors and performances. Based on the discussions above, this paper analyzes the relationship between fund management companies' shareholder structures and the protection of fund investors' interests, and in turns reveals how shareholder structures effect on performances. After that, the author establishes a multiple regression empirical model with the adjusted fund returns as the independent variable and the fund management companies'shareholder structures as the dependent variable. Using the newest data of different funds' performances under the different shareholder structures, the result points out that the shareholder structures do effect on performances and showes what kind of structure would protect investors' interests better. Finally, the author suggests a "best" shareholder structure:one absolute dominant shareholder, five or six shareholders constituting the Board, and with securities companies as large shareholders. The fund market are maintained and operated based on the investors' will, which depends on the trust on the fund management companies. If the funds abuse investors' trust, harm their interests and undermine their confidence, they are actually ruining the fund market as well as the entire capital market's efficiency. Obviously, how to well protect the investors' interests and their confidence is the core issue of the fund management companies' corporate governance structure development. At last, this paper also trys to answer the question that how the investors could protect themselves taking advantage of the conflicts among different shareholders.