Study On Incentive Mechanism To Fund Manager

In recent years, China's securities investment fund industry has developed rapidly, and it is playing a more important role in the financial system. It not only broadens the investment channels for small and medium investors, but also optimizes the financial structure, improve the financial system and promote economic growth. But at the same time, China's fund industry has also exposed a number of issues, particularly with regard to fund managers, the phenomenon of self-motivation and the mobility of fund managers has been increasing.It not only damages the interests of fund investors and the fund company, but also creates the loss of the company's core talent. So it is harmful to the stability of fund performance and the healthy development of China's fund industry. The reason for this was mainly due to the related imperfect incentives. In view of the important role of the fund manager in a Fund as well as the fund industry in China's financial system, we need to speed up the process of research for fund manager incentives. This paper selectes a unique perspective, that is, from the life cycle of a fund to study the corresponding incentives. At first, this paper discusses that how to choose the right fund manager and give the appropriate incentives standard in a newly established fund. By building the multiple linear regression equation which regards to the fund performance and the characteristics of fund managers, and taking advantage of the data of currency funds in the year of 2008 for the regression analysis, we can get the significant relationship between the fund managers' capacity and their external characteristics. So it offers a criteria for the choice of fund managers and the determinant of the appropriate incentives. Next, this paper discusses how to choose the right fund manager in the continuing operation of the Fund. In addition to analyzing the existing incentive approach(the absolute and relative performance incentives), this paper focuses on the incentives which China's fund industry should develop in the future, such as equity-based incentive, EVA incentive and professional reputation incentive. Equity-based incentive is the more popular international incentive approach, so this paper only give a simple analysis; for the EVA incentive, the paper first describes the course of its development, then by analyzing the conditions of its applicability and designing the calculation indicators, introduces EVA to the research of fund manager incentives, and also explore its unique role; Finally, this paper not only studies the promotion of the manage market to the incentives, explores its mechanism of action, but also puts forward some policy recommendations with regard to our country' s circumstance.