Main Problem Of The Open-end Fund Management

The study for operation mechanism of open-end fund is a new subject put forward by the demand of the development above convention of institution investors in Chinese securities market. In this article according to the investment theory, contract economics and information economics, we selectively assimilate the fruits of the governance structure theory, accounting principles and philosophical thinking. We systematically study the problems existing in the operation of open-end fund, and make a comparative research on the operation experience of open-end fund of the developed countries and areas. Based on which the concrete thoughts and methods for bettering the operation of Chinese open-end fund are proposed.The main conclusions of this article are as follows: (1) To develop the open-end fund is the requisition for the innovation of fund industry. At the present, ,the tough problems faced by the operation of open-end fund are related to the level of our country's securities market to a great extent. (2) The high cost of open-end fund is reasonable, and the incretion of returns for investors increase progressively as time goes on. Accordingly, the rate of fees should be reduced with the lapse of time. (3) The liquidity management with the respects of assets, liabilities and technological methods can cut down the risk caused by the low liquidity of stock market in China to some extent. (4) With the analysis under the incomplete contract theory and principal-agent theory, there is no such an optimum governance structure for open-end fund either contract style or corporate style. Thereby, we should strengthen the functions of trustee of open-end fund, cultivate the managers of open-end fund decided by market, establish the mechanism of independent directors and introduce the mechanism of corporate to soften the moral hazard. (5) The task of top priority is to set up the perfect system of laws and regulations for supervision for it is the external environment the operation of open-end fund depending on.