The Investment Style Of QFII In The Securities Market In China

The QFII in the securities market of China has been introduced in May of 2003, and now both the quantity of investment limit and the number of QFII are on increase. To the end of 2008, 76 QFII has been qualified. After the stop of approval in 2007,24 QFII has been introduced in 2008.The QFII has been introduced in order to solve the problems about the opening of domestic securities market in the condition of capital under control. As the investment from QFII increased, the QFII has already had a huge influence on the domestic securities market. The investment by QFII can not only bring the capital for our domestic securities market but also bring the advanced management experience and sight for other institution investors. Thus, it's essential for us to study the investment style of QFII in our securities market by introducing the advanced method adopted by the foreign scholars.Actually, some scholars has already focused on the study about the influence on the domestic securities market and economy of China by QFII. And others research has described the characteristics of holding stocks by QFII and the industry distribution. However, those studies lack of the support of finance theory and analysis methods. What's more, those studies are designed for the performance of QFII before 2007, which means that there is almost no study about the investment behavior of QFII after 2007. Therefore, it's necessary for us to identify the investment style of QFII in domestic securities market. In this article, we will firstly describe the holding time, size of QFII and the characteristics of investment industry and the holding stock in order to understand the preference of QFII to the industry and whether the investment of QFII was on concentration or not Then we will identify the investment style of QFII from the second quarter of 2007 to the first quarter of 2008 and analyze the reason for those behavior of QFII by introducing the advanced analysis method.