Empirical Analysis On Tournament Of China`s Open-ended Fund

Using the tournament concept as a framework, The topic of this study, focuses on how the competitive environments of mutual fund affect the managers'portfolio decision-making and risk-adjusted behavior. With it , the paper examines whether the fund managers is aim to maximize earnings of fund investors or attributes to benefits for themselves. This paper is organized as follows:Chapter I & II briefly shows the research background, motivation, the related literature both at home and abroad and points out the innovations and shortcomings of this paper,and then made a brief introduction of the development of fund and families in China.Chapter III shows the theory analysis. We analysis the tournaments of funds from the perspective of both Principal-Agency Problem and the PFR Relationship.Chapter IV to VI show the empirical analysis. Chapter IV, we examine the Performance—Inflow Relationship(PFR)in China`s open-ended fund market. Empirical results shows an contrary conclusions compare with foreign funds in China, the net subscribe for a fund is negatively related to it`s performance, a better performance did not bring a net inflow to funds, but showed an increase in redemption, investors show a "reverse choice"in the redemption. With this conclusion, the tournament does exist, and the motivation for the behavior is worth further exploration.Chapter V, we have empirical research on how the place in a tournament effects the risk-adjusted behavior of the fund manger. The result is that in our fund manager can make risk-adjusted behavior basing on place in a tournament, and losers prefer to revise the risk level greatly, especially when the fund is a new and small one.Chapter VI, we examine the tournament behavior of the fund within a family. Empirical analysis shows take each family as a competitive environment, under the relative performance ranking of implicit incentive mechanism, risk-adjusted behavior does exist, losers prefer to revise the risk level greatly. This shows that the tournament concept, does exist not only in the fund industry, it is also present in fund management company.Chapter VII, is the conclusion including further study prospects for this paper.