The Research On The Risk Management Of The Open-ended Fund

Since China's first open-end fund Hua'an created in 2001, the funds management industry has obtained the huge development. With the development of the funds management industry, many problems bring to people's attention and are being studied, such as how to build the investment Portfolio to make the fund holders benefit the most at the same market risk; how to process the relation of liquidity and benefit to prevent the large redemption of open-end funds; and how to conduct the internal control risk of the funds management company. The main purpose of the study is to guide practice, and hope the study can be a help for the fund management companies—To make them have a higher level to manage risk and become more competitive in the fierce external environment.Through the study on domestic and international relevant theory, it combines the current situation of the security market of our country, and regards market risk, liquidity risk, internal risk of the open-ended fund as the focal point, carries on overall, systematic, deep studying to relevant problems, following the three steps:the risk identification, risk measurement, risk prevention.Part one, This part is an overview of the risk of the open-end fund and the risk management theory, including the open-end fund's concept and characters, the emergence reason of the open-end fund risks, the special nature of the risk etc. All these just pave the way for the later parts.The second part is the research on the open-end fund market risk management. As the primary risk for the open-end fund, This section first divided the market risk into systemic risk and non-systemic risk, and then quoted the beta coefficient, Markowitz Portfolio theory separately to the system risk measure and the non-system risk measure, finally came to the conclusion:in a timely manner with derivative financial instruments are effective in avoiding systemic risk, and appropriate use of a good asset allocation can be effectively spread of non-systemic risk.The third part is the research on the open-end fund liquidity risk management. Open-end fund's liquidity risk is a comprehensive risk, it is a number of risks in the fund the company's overall viability of the concentrated expression, such as market risk and the occurrence of moral hazard may lead to fund liquidity risk. This section will first divided the liquidity risk into exogenous and endogenous liquidity risk, which exogenous liquidity risk in general is difficult to measure and also difficult to control, and endogenous liquidity risk can be control by the Fund manager. Then quote a VAR approach to measure the open-end fund's liquidity risk, finally focusing on open-end fund's liquidity risk control measures---through the "balanced" management approach to strengthen the Fund's asset allocation management, and take the initiative to finance management and improve the level of fund management, etc., may spread the liquidity risk.The fourth part is the research on the open-end fund internal risk management. In identifying fund management company's internal risks, we sum up through the perspective of corporate governance and the strengthening of internal controls can guard against the perspective of the fund company's internal risk. In corporate governance, creating a favorable market environment (including a sound legal system, the establishment of efficient fund performance evaluation system and establish a professional manager who developed the market, regulatory authorities should also strengthen supervision), and the introduction of corporate fund management structure, and the strengthening of the fund trustee oversight responsibilities. In strengthening internal controls, the article will learn from the U.S. COSO internal control theory, and apply the theory to the fund management company in order to reduce moral hazard and operational risk.The fifth part is use Guangfa Fund Management Limited Company as our case for the further research. Through the actual analysis of the risks of the Guangfa Fund Management Limited Company, we come to the following conclusions:First, through asset allocation can be a good method for the spread of non-systemic risk, but because the fund management companies trend to invest in the same convergence concept, thus lead to the same convergence of investment behavior and affect avoidance of the investment risk, but also enlarge the non-systemic risk. And only rational, differentiated investment could make the investment to achieve a more bring good returns. Second, by the analysis of redemption of the Guangfa funds in 2008, we obtain that with the increase in open-end funds and investors, changes in investment philosophy. fund managers of poor performance will be forced out of the market situation. For the fund managers, in order to avoid a net redemption of the fund thus lead to increased demand for cash, they should research carefully on the structural analysis of fund holders; increase mobility of high stock holding ratio,rational distribution of liquid bonds and cash ratio. As fund managers, only by constantly improving the level of fund management, controlling investment risk well, they can win in the fierce market competition. Third, through the discussion of the internal control of the Guangfa Fund Management Company, arrive at the company's internal risk issues and strengthen countermeasures. Finally sum up and come to the following conclusion: in our less mature markets, Guangfa Fund Companies have to focus on his internal risk control, standardize their fund manager's operation to control risk better, in order to win the trust of investors and win in the fierce market competition.The sixth part the paper study conclusions and recommendations. The paper finally point out that the Study of open-end fund risk management, is not just the fund management company's matters, it should be a topic of common concern, including securities regulators, market intermediaries, investors, stock market, including all those involved, it need for effective coordination of all involved in order to make open-end fund to be better development.The article research goal is expected to through the risk study, we can establish the basic framework for risk management:risk identification---risk measurement---risk control and management measures, enrich the theory of securities investment risk, and have a certain referential significance for the fund management companies.