Empirical Study On The Performance Of Stock Mutual Funds In China

With the rapid development of security market in China, the stock mutual funds have become one of the most important institutional investors in financial market in our country. However, compared with the rapid development of the stock mutual funds, the research is relatively lagged behind in terms of performance evaluation of the stock mutual funds. How to evaluate the performance of stock mutual funds objectively and scientifically has significant meanings to funds investors, funds management companies and watchdogs. This paper focuses on the theoretical and empirical analysis and researches.This paper aims at how to evaluate the performance of the stock mutual funds in our country and answering following questions: (1) How to evaluate the investing performance of stock mutual funds in our country scientifically; (2) Whether the evaluating standards of stock mutual funds reflect the return-risk level objectively; (3) By analyzing the results of empirical research, what problems exist in the operational processes of stock mutual funds in our country and how to solve them.This paper uses the method combining theoretical analysis and empirical research. With the basis of funds evaluation theories, it discusses and analyzes some kinds of evaluating methods stemming from theoretical basis and then conducts empirical research on the performance of stock mutual funds in our country with the methods mentioned above.We can conclude from the empirical research that when evaluating stock mutual funds with net value return ratio the investing risk should be considered. The sample funds don't have the ability of securities selectivity but the ability of market timing to some extent during the evaluating period. We can not conclude from the relationship test of two-phase Sharp ratio of sample funds that the funds have performance persistence. Besides, the liquidity risk faced by sample funds is not serious and the asset allocation of investment portfolio coincide the style of the funds.According to the conclusions above and the characteristics of the stock mutual funds, two aspects should be enhanced in order to improve the performance of stock mutual funds. First, our security market and its working mechanism should be perfected, financial innovation should be encouraged and the number of investing products should be increased; Second, we should enhance the inner management mechanism of stock mutual funds, the funds' risk sense should be highlighted, professional morality education for funds' management group should be stressed, outer management and information release should be improved and independent funds evaluation institutions should be established as soon as possible.