Research On The Investment Style And Adjusted Performance Of Chinese Open-end Funds

With the development of the open-end funds, it is import of classification of the funds. The investors need to choose the appropriate funds between a number of funds; The fund management company wants to find the proper comparative standards. However , the number of methods on classification of the Chinese funds is so large that it is difficult for the investors to distinguish the funds fitting to their own risk preference. Investigation on the funds invest style of is the first step to choosing the 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 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.Firstly, the paper introduces conception of investment funds and the evaluation system of fund profit index.Secondly, methods of funds classification and identification are introduced. The paper identifies and analyzes the open-end funds style with Sharpe model in China.Thirdly, calculation methods of adjusted performance are introduced. Using Lobosco method, the writer calculates the sample adjusted performance.Finally, by the quantitative, qualitative and comparative methods, the conclusions are obtained, the reasons are analyzed, the suggestions are proposed.Unstability of the funds'style is proved by demonstration research method in this paper. When the stock market is increasing, fund managers pay attention to pursuing excess return. When the stock market is dropping, fund managers try to maintain benchmark rate of return.Through the analysis on adjusted performance with Lobosco method, we can draw a conclusion: fund mangers can gain the excess return, but it is not significantly.