The Evaluation On Performance Of Open-end Funds In China

The securities investment funds in China, as one of three main investment vehicles, grew rapidly in recentlt more than ten years. By the end of 2009, the quantity of fund management company in China already achieved 60; It altogether has 557 securities investment funds; the assets scale has amounted to 2,676,080,000,000 RMB, which compare with 1998 grew approximately 248 times. The open-end funds grow rapidly from nothing to become the mainstream in China securities investment funds day by day. By the end of 2009, the 526 open-end fund property amounted to 2,552,200,000,000 RMB, which accounted for 95.37% of the complete fund assets; the share scale equaled 2,359,005,000,000 RMB, occupied 96.15% of the complete fund share scale.Regardless of from fund management company's quantity or from the asset management scale, the speed of China securities investment fund development grew rapidly. The fund plays more and more vital role in the investment, it not only contribute to the investors holding the investment value, but also contribute to that the fund managers are supervised by the fund holders and the regulator,thus it will promote the entire stock market for healthy development. Therefore, the evaluation study of fund performance is an important issue of investment funds industry and it has the theoretical value and the practical significance to the development of investment funds industry.Because the domestic research mostly use the single indicator with the help of foreign traditional method, but little uses nontraditional method to analyze and to put forward the improvable proposal explicitly; select input and output indicators subjectively in DEA evaluation, which has affected the accuracy of measure results; appraisal period is too short to reflect the market cycle performance, This article will aim at these insufficiency to appraise the fund performance.This article altogether divides into six parts.In the first part, it has carried on the review in the first part to the domestic and foreign research literature; In the part of fund present situation analysis, summarizes the origin development and the characteristic of securities investment funds, and has analyzed the present situation of the securities investment funds in China from scale and structure. In the third part of this article elaborates various traditional method, DEA and the combination method of DEA and the factor analysis systematically. By using of factor analysis and Data Envelopment Analysis, in the empirical research part of this article comparatives analysis of funds performance evaluation models and methods, combined with the developmental status quo of China's funds, makes an empirical research of performance evaluation. The economic significance factors, which are objectively determined as the input and output indicators by analyzing those indicators of income, risk, choosing, timing and expenses, makes up the evaluation system. Finally,makes an empirical research on 37 open-end funds from January 1st,2005 to December 31st,2009 with DEA model input and output indicators, which are objectively determined in the factor analysis and calculates the sample's value of efficiency and the ranking, analyzing the situation aim at the efficiency. This paper also analyses the short and long-term sustainability on the basis of their efficiency analysis. In final part of this article,it obtains the conclusions.The conclusions of this paper are as follows:(1) Data Envelopment Analysis on market requirements and assumptions has broader applicability, compared with traditional methods of fund performance evaluation; (2) most of the sample are not effective, and the scale of size on efficiency is not significant,namely fund performance and its scale is not positive connection; (3) the performance of value fund is good compared with other types of funds; (4) the performance of sample has a short duration,therefore the findings has a certain degree of significance in the short-term for the investors and fund managers.The primary contrbutions of this paper:(1) using combination method to evaluate the fund performance roundly and objectively, namely take the main factor, objectively determined by factor analysis,as the input and output indicators which make up the evaluation system of DEA. It rank the fund from income, risk, choosing and timing; (2) carrying on the fund sustainability analysis to guarantee fund performance evaluation has practice significance; (3) the selection period of sample is five years,the time is long,moreover the indicators is more comprehensive because it contained the domestic and foreign classical evaluating indicator, to make results be relatively accurate.