| In September 2001, two open-ended investment funds, Huaan Innovation Fund and South Development Fund, were successfully issued, which starts the development of open-ended fund in China. This is an important breakthrough in the Financial Market, which will substantially influence the China economy as a whole.Meanwhile, professionals and researchers express their doubts to the sales potential of these two funds, Because private investors are not actively invest on it. In the United States, open-ended investment fund is also called mutual fund, and over half families invest on mutual fund, which is still in an up-trend. So, some professionals and researchers think that the issue of open-ended fund lack sound circumstance, and will not develop healthily.This essay focus on discussing whether the conditions meet the requirements of the issue of the open-ended fund, whether the private investors can gain profit from this kind of fund, whether we should exert extra effort to develop the open ended fund in the future in six sections.In the first section, the definition of the open-ended fund and the close-ended fund is introduced, and the difference between these two funds is described. Then, the open-ended fund is discussed in light of classification according to various criteria. Additionally, the legal issues relating to open-ended fund is also discussed in detail. Legal issues correlated with ensuring the right and obligation of all investors.The operation modality of fund is described in Second two. The application, redeem, information announcement, specific to open-ended fund, is described. The incentive and obligate effect of the open-ended fund operation modality to fund managers is also discussed. These two facets work to support the argument that the open-ended fund overcome the defects of the close-ended fund and show its specific merits, which provides the fundamental reasons to explain the development of the open-ended fund.The tendency for open-ended fund development is discussed in Section Three. The history of the fund development in global scope is briefly reviewed. It shows that the history of the fund development is a history of transferring from the close-ended fund to the open-ended fund. Sum up, the evolution of fund operation modality and the open-ended fund's dominant position provide important reference the fund development inChina. Then the history of the China fund development in the last decade is reviewed and analyzed. It develops from badly ordered to well ordered and from simple to comprehensive. It can be optimistically forecasted that the open-ended fund will take a dominant role in the next few years.China Capital Market exerts a demand on the development of the open-ended fund, which is discussed in Section Four. The introduction of the open-ended fund will push forward the perfection of the China Capital Market. Generally speaking, with the introduction of open-ended fund, the development bottleneck of the capital will be broken. The introduction of open-ended fund will lead the investors to build up the positive and healthy investment sense. It will benefit China withstanding the influence of China's enter of WTO.The fundamental conditions to the development of the open-ended fund are discussed in Section Five. The current situation of China economy and China Capital Market are compared and analyzed, which shows that the basic terms for the development of open-ended fund is possessed.Several problems that need to be concerned are discussed in Section Six. Because the open-ended fund can overcome the intrinsic drawbacks of the close-ended fund, and can better ensure the benefit of the investors, the open-ended fund should be further developed in China. The questions, concerning how to develop open-ended fund and what are the key issues in progress, are thoroughly discussed. The answers suited to China's situation, such as strengthening the legal monitor, improving the performance of fund managers, and encouraging the financial innovations are described in de... |
