A Study On Investment Default Actions Of Chinese Open-ended Fund

In Recent years, with the rapid growth of Chinese security investment fund, open-ended fund gradually becomes mainstream of security market. However, along with continuous exaggeration of the scale, investment fund'default actions always happen. Typical default action is fund's investment scope and strategy surpass the contract'range. It will harm fund holders'interests.So far, related studies concentrate on empirical research of fund's style drift. Other than former studies, in this paper, empirical research of fund's default actions bases on the incomplete contract theory. In accordance with our empirical result, bigger self-enforcing capital helps restrain open-ended fund's default action. Low self-enforcing capital level is main reason of open-ended fund's high default level.By empirical research of Chinese open-ended fund default actions'economic consequences, we find out that open-ended fund default actions not only can't bring any abnormal return, but also intensify stock price fluctuation and inflate the financial asset bubble.