The Comparative Study Of Investment Strategy Between Open-end Fund And QFII On Stock Market In China

Since the resent raped developing of Chinese securities investment funds and QFII in china, institutional investors have became more and more important in Chinese capital market. No matter how we analyze the investment strategy of these companies, either in theoretical way or in practice operation, we do find this kind of research has very important meaning for our market.This paper describes the development progress of securities investment funds and QFII and compares their investment constraints. On this basis, this paper would compare the differences in the selection of both industries and ratio of capital allocation, trading strategy and risk-adjusted return between Chinese Open-end funds and QFII according to the latest data, multivariate statistical and financial models.According to our research, we found that Chinese Open-end funds prefer financial industry, mechanism, instrument and Metal nonmetallic industry. On the other hand, QFII prefer mechanism, instrument and Metal nonmetallic industry, then they would like to invest transportation, warehousing, oil, chemical, plastic, plastic industry. What both two kind of funds agreed is that the manufacturing industry in china would develop very quickly as china become the world factory, a slide difference here is that Chinese Open-end funds are always very interested in insurance industry while QFII funds drew their attention on this industry after 2008.Before 2008, the companies attracted Chinese Open-end funds were the company that their first shareholder had less impact on their companies. After 2008, Chinese Open-end funds changed their strategy to the opposite companies, and they did not emphasized on the ROE of their invested companies, they just tried to earn by speculation. Meanwhile, QFII funds still sticks on their investment strategy to invest on company based on the analysis of the basic financial conditions of this company. Based on their strategies, we found that Chinese Open-end funds have more risks than QFII funds. They also had a negative impact on the volatility of Chinese stock market. From the perspective of risk-adjusted return, the performances of QFII and Chinese Open-end funds are evenly equal. QFII is more outstanding during the volatility of stock market, while Chinese Open-end funds are better in the early rise of stock market. However, comparing the return of unit risk of stock market, open-end fund's trading strategy is better than the QFII's, which means that at this stage open-end funds are more suitable to China's stock market.At last, this paper presents some advice and expectation of the future development of both Chinese securities investment funds and QFII according to the research results.