Research On Factors That Affect The Cash Dividend Of Closed-end Fund

Securities Investment Fund is a sharing of benefits and risks of a collection of investment, it is through the public offering to raise funds from investors and professional fund management companies through investment banking, to achieve risk diversification, cost savings, increased revenue purposes.March 1998 China's first closed-end funds-the birth of Jijinjintai opened securities investment fund industry in China prelude, then, in September 2001 the first open-end fund in China marks the birth of innovation. China's open-end fund has entered into a stage for the fund industry, since then, China's fund industry started its rapid development. As today's financial market is one of the most popular financial instruments, securities investment funds attract more and more investors. With the expansion of its securities investment fund in a stable market, promote rational investment has played an increasingly important role.The development of securities investment fund industry takes more and more attention, as ordinary investors tend to consider ways to select the Fund as an investment. Selection criteria for investors, the Fund dividend are an important standard.There are many factors that affect cash dividend of the closed-end fund, in theory, the role of the factors that are not really the actual amount of cash dividends in the fund. This paper based on the theoretical analysis of the impact of cash dividend fund factor model, related to the Fund through the generation of specific data, testing the accuracy of the model, the ultimate impact of China's fund market to find a major factor in the cash dividend. This study hopes to achieve the following objectives:(1) to find out the main factors that affect the cash dividend of funds for the majority of investors reference;(2) to have a comprehensive sort of the development of China's fund industry, identify problems in the development process, and put out policy recommendations.Cash dividend for the closed-end funds empirical research to study is one of the major issues, including the Fund's choice of paying cash dividend motivation, namely, when the cash dividend policy considerations, as well as indirectly related to the cash dividend with a variety of factors. Many of these factors, the paper summarize the theoretical framework based on the following main aspects. First, the relevant laws and regulations; second, fund operating results; Third, the Fund's distribution will.In our country, "Securities Investment Fund Law" clearly defined, closed-end fund's income distribution must be taken in cash, not less than once a year, and the proportion of the annual income distribution of the annual net income of not less than 90% of the Fund. April 2009 the Commission issued to fund the "income distribution provisions of the Securities Investment Fund audit guidelines" for the "Securities Investment Fund Law" does not explicitly stipulated in places, such as conditions of the Fund dividends a more clear and detailed requirements. The revised dividend condition "base date of distribution of fund proceeds of fund shares minus the per unit amount of fund shares after the distribution of income can not be less than the face value." Prior to this, the fund contract general conditions of the general provisions of the dividend "after the distribution of fund proceeds can not be less than the face value of fund shares" and other similar terms. In accordance with the "Guide" provides funds only to meet the end of the period after subtracting the net dividend amount of not less than 1 per condition, even if the bonus value is lower than 1 per day also need to dividends. In addition, the provisions of the fund contract can not be agreed "there is a net loss of current fund investors, not the income distribution" and so prone to ambiguous terms. Fund for the year 2007, the controversy is the income distribution was created.There are three prerequisites must be met before the fund company divide cash dividends, the first is that income fund to make up losses the year before the distribution, the second fund shares after the net income distribution can not be less than the face value of the third period there is a net loss of investment funds can not be allocated. Therefore, the cash dividend fund is an important prerequisite for good business performance fund, that fund should have a positive net income. The basis of cash dividends the Fund, the Fund directly affects the size of net income support funds of the size of the cash dividend.At the part of empirical analysis, we put out eight assumptions before starting t the research of factors that affect the cash dividends of closed-end found.Assuming one:profitability is stronger, the higher the allocation of cash dividends.Assuming two:the higher the annual distribution of cash dividends, the current distribution of the higher cash dividends.Assuming three:the larger the company, the higher the allocation of cash dividends.Assuming four:Fund the higher market price, the higher the distribution of cash dividends.Assuming five:The higher unit net asset value, the higher the allocation of cash dividends.Assuming six:the higher the debt ratio, the lower distribution of cash dividends.Assuming seven:different fund of funds manager are basically the same ability to investAssuming eight:risk has little effect on the income of the FundAfter that we selected the 2008 cash dividends as explanatory variables, on behalf of several major assumptions in the fund's financial data related indicators as explanatory variables, the model designed to test the hypothesis. Significant regression results, after a series of amendments, the following conclusions:Assuming an acceptable profitability of the Fund's cash dividend significant impact.Accept the second assumption, the previous annual dividend distribution of cash dividends on the Fund's significant impact.For hypothesis three, the larger fund companies, the higher its cash dividend distribution. If fund companies based on size and there is a positive correlation between the Fund's assets basis, we can accept the hypothesis.Accept the assumption four, both from a theoretical point of view or from the practical significance to the demonstration analysis, the market value of the Fund are to some extent, reflects the fund's profitability. According to signaling theory, the stock market is a reflection of the company's future profitability, while the real buyers and fund the company's information asymmetry is also the Fund's market price has become an important buying decision based on judgments.Accept the hypothesis five, the situation on the NAV of the Fund dividends there. Six refused to assume the debt ratio had no effect on the fund in cash dividends. In discussing the size of company cash dividend on the impact of the Fund, we talk about the balance scale problem. Since the Fund's actual data 31 show that, compared with the assets, liabilities accounted for too small and not sufficient to explain the size of company, so we analyze the results of the regression did not focus so much debt when the impact of the situation. Debt ratio will be singled out here, no significant regression results prove that it did not affect cash dividend fund.Of course, there are many limitations of the article. In order to describe the behavior of many complexes, the design of the quantitative relationship between the models presented is not a simple linear relationship, which is beyond our econometric learned knowledge and ability. Therefore, for these problems, we can not demonstrate a comprehensive analysis, only second best, some of the cash dividend with respect to fund a very important but complex aspect of the assumed form, immobilization, and strive to be a relatively simple line model, and in conclusion some of the financial management of loan maturity in theory be described. Finally, we must admit that the addition of assumptions to reduce uncertainty, so our conclusion is still the company's cash dividend distribution on the Fund's general level of the qualitative conclusions.Throughout the study, we also found a lot problems of the development of China's fund industry, such as lack of fund managers and improve the incentive and restraint mechanisms, fund holders are not effectively play the role of the General Assembly, the need to improve the quality of listed companies, industry structure still need to expand, China's financial market and capital market lacks innovation. To solve these problems, the article attempts to provide policy recommendations in the hope that China's fund industry goes steadily and healthily.