| Equity open-end fund has achieved a significant development in China since it was issued at September 2001. Now, the individual investors have become the dominated part in the open-end fund market. For the short history of china security market, most of them are not rational and prefer the frequent transaction, which lead to the large fluctuation of equity open-end fund's scale.Based on the analysis of the cash flows of china equity open-end fund market, The thesis will focus on the sensitivity analysis of SSE(Shanghai Stock Exchange) Composite Index to changes in cash flows of china equity open-end fund market which is affected by the purchase and redemption activity of investors. Also, this paper will interpret the investment decisions and exceptional transactions of investors referred to the behavioral finance theory.The conclusions are as follows:(1)China equity open-end fund investors have obvious availability bias when they make investment decisions and pay more attention to the SSE Composite Index yield of current period and last periods. (2)Investors' activity is not significantly correlated with the yields of following periods. (3)The purchase of investors is under-reaction in the preceding period of bull market and over-reaction in the other period of bull market. (4) "Exceptional redemption" has existed in china. (5) The redemption of investors is over-reaction in the preceding period of bull market. (6) "Disposition effect" is obviously in existence when the SSE Composite Index falls sharply, for remarkable investors' redemption has not happened. (7) Most of investors become more rational and will not transact frequently in the fluctuation of short term.Ultimately, the thesis proposes that we should enhance the education of investors durativly, which need the positive function of distribution channels. And regulations should be issued to decrease the large amount redemption of mutual fund by increasing the dividend payment. |
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