Study On The Investment Style Drift Of Chinese Open - End Securities Investment Funds

In recent years, China's securities investment funds has grown in strength in the background of the rapid development of China's securities market and the development of institutional investors encouraged by the government, most of which are open-end mutual funds. With the maturing of China's stock market, investment analysis are more and more complex, but investors lack the relevant expertise and skills, so they can select an appropriate fund according to their risk attitude, which mainly reflected in Fund style. Although China's securities investment funds have demonstrated the fund's investment style, in actual operation, there were a lot of fund style drifts which bring plight for the investors to select proper mutual funds. Therefore, the systematic research of open-end fund's investment style has a strong practical significance.Firstly, this article briefly introduces open-end mutual funds developments in foreign and domestic market. The "classification of thinking" of human being used in investment, the investment style appeared. This paper gives the definition of investment style and style drift. Subsequently, this paper described in detail two commonly used classification of funds that is, the value / growth and large / small styles. Then again, this article discusses three theories of fund style: modern portfolio theory, information economics and behavioral finance theory.Secondly, this paper carried out an empirical study of open-end mutual fund. It introduces two types of fund-style identification method: based on the style of portfolio analysis and yield-based style analysis. Then it compares these two methods from the predictability, accuracy, timeliness and data acquire. This paper choose the yield-based method, and found that the convergence of the Fund's investments in the big-value style, and style drifts during the study period, and also showed that there is no strong correlation between the continuity of fund-style and the fund performance. Finally, this article discusses the reasons of the style drift and style convergence, including the lack management experience of mobility risk, the scare of high-quality investment instruments, fund managers adjustment and performance pressure, and the convergence of investment behavior of fund managers. Then this article gives the relevant policy recommendations from view of the regulatory authorities, fund management companies, investors, funds and other related service agencies.