Open Equity Funds Stability Analysis Of China's Stock Market

Chinese stock market has developed for more than ten years, but it is always deemed as a market that is easily influenced by the policy of the state, and the risks from system are so strong that the price of stocks has a great fluctuation range. And the root of fluctuation in the stock's price is the imbalance of the investors' structure which is accepted universely, so the experts and the managers advocate the instruction and development of institute investors especially for securities investment fund, and its purpose is to make the most use of the reasonable investment behavior of the institute investors to make the stock market more steady.The securities investment fund has been a dominated market force just for several years' development, and it has a strong impact on the securities market. As for the stock-dominated open-ended securities investment fund, it has the highest ratio in the securities market and it invests most of its money on the stocks, so its investment behavior will have a strong influence on the stock market, and if we test it's influence on the stock market that will have a reality purpose, meanwhile we can test whether this kind of securities investment fund has the mechanism as expected to make the stock market more steady.As for this paper's structure, we describe and analyse the influence of China's stock-dominated open-ended securities investment fund on the stability of our country's stock market theoretically and practically. About the theory study on this paper, we state the theory about stock market's stability firstly, then we state the theory about their relationship, including the theory focused on the reasonable investor and investment combination and the principal-agent theory. We also test the study on the ratio of securities investment fund holding stocks from the macroeconomic aspect and the herd behavior based on the microeconomic aspect, then we test their influence on the stock market's stability separately.At last we put forward several suggestions based on the result of study after the analysis of relevant reasons about our country's securities investment fund's mechanism to make the stock market more steady which doesn't be fully realized.