Analysis Of Empirical Research And Countermeasures Of Chinese Securities Investment Fund Herd Behavior

As the promulgate of Chinese Securities Funds Law at the end of 2003 and the rapidly development of Chinese open-end funds, it is particularly important to focus on the investment behaviors including herding behavior of Chinese securities funds.In this paper, I firstly do some empirical study of twenty closed-end and fifteen open-end funds in China market dated from 1999 to 2003, and found distinct herding effect in general while closed-end funds presents more distinct than that of open-end funds. And also, the same herding effects were found and present different characteristics in study of different groups specially to that of stocks scale, stocks yields, stocks industries and funds management companies.On the other hand, this paper deeply analyses the causes of the herding behavior in China funds markets and put forward suggestions and solutions restraining herding behavior from both macro and micro aspects. This paper initially put forward a system arrangement of incentive compensation payment of securities funds managers.