The Empirical Study On Value Investing Strategy Of Securities Investment Funds In China

In the United States and other developed financial markets,the investment funds can often be equal with the banking industry.If coupled with the rapid developing asset management industry in broader sense,the funds industry as a whole plays a more dominant role in the financial markets.However,in China although the asset management industry,which started by the funds development,has made great progress,it is only in the initial stage compared with the huge scale of banking industry.In the financial industry,the more rapid the stage,it needs more diversified research.Continuing analysis in a wide range is vital for the industry development.It makes sense to the banking industry,so does to the fired industry.As China's Securities Investment Fund rapidly expands,it plays a more and more important role in the capital market.As the most denominating institutional investors,the investment philosophy,stock selection of the investment funds are bound to impact the whole market.The value investing strategy they advocate can be expected to be the leading strategy in the future markets.The paper combined the qualitative analysis and quantitative research,made integrated use of modern financial economics and research method and it constituted a systematic research with depth on the value investing of the China's Securities investment funds.In addition to Chapter 0 and Chapter 5,respectively,introduction and summarization,the main body of the paper is composed of 4 Chapters. Respectively the theory introduction,the feasibility analysis,applied research and suggestion.The main conclusions of the paper are as follows:(a) As the rest of the world stock markets,the value investing strategy is feasible in China.Value-based portfolios can beat both the growth-based portfolios and the market.(b) In general,the funds in China did not follow the true sense of the Value Investing.One of the evidence is the proportion held by funds has a negative correlation with the BP of the stock,which is in total wrong direction with the traditional value investing strategy.(c) The paper made an analysis of the reason why the funds did not adhere to the value investment strategy as they advocated from both internal and external perspectives.The internal factors,the dominant factor in investment behavior, included the fund management performance valuation,income mechanism and governance mechanisms.The external factors include the market system,the quality of listed companies,the concept of small and medium-sized investors,as well as areas such as policies on the regulation.All of these external factors influenced the investment behavior of the funds. (d) The paper demonstrates that the value investing strategy is feasible and effective.To adhere to value investing strategy in the stock selection will bring considerable superior return.The paper also found that the funds did not strictly implement the value investing strategy as they advocated.Based on the internal and external factors that influence the funds investment behavior,the paper proposed a number of suggestions to enhance the value investing behavior of the funds.The suggestions include that to improve the performance valuation system of the funds and the income structure of the fund management companies,to establish the stable and found governance system,to lay a solid foundation of the stock market,to improve the quality of the listed companies,deepen the investor education and explore the market-oriented fund supervision.The main innovations and contributions are as follows:(a) To do a comprehensive study on the value investing strategy combined the quantitative and qualitative methodsRather than introduction to the value investment theory or simple demonstration of the applicability of value investment,the paper deepened and combined both of them.It did a comprehensive study on the value investing strategy theory and application combined the quantitative and qualitative methods.(b) To test value investing behavior of the China's Funds with the empirical methodBy the empirical method of the value investing,the paper found that in contrast to the common understanding,China's Funds did not adhere to the value investing strategy.(c) To analyze the factors that influenced the funds investment behaviors in internal and external point of view and therefore put forward to practical proposals.At present,the recommendations to implement the value investment strategy limited to the stock market,individual investors,government policy and other external factors.The paper considered that the external factors indeed influenced the investment behavior of the funds.However,it is the internal factors that denominate the funds investment behavior.These factors include that the performance valuation system,income mechanism and governance mechanism.It is necessary to promote the application of the value investing strategy from both the internal and external prospective.Due to the limited academic ability and time,there are still several problems in the paper,the explanatory power of the model is relatively poor.It may show the poor relation of the funds investment behavior and value investing standards of stock selection.Unfortunately,the paper did not find a better method to improve.Besides, for the poor practical experience of the author,the biased and superficial understanding in the paper would be inevitable.