The Impact Of Star Fund Spillover Effect

From the issue of China's first open-end fund it has past ten years now. During this time, open-end fund in China has made great achievements. As of the end of 2010, China had 727 open-end funds, accounted for 93% of the total funds. Fund family concept is emerging in this condition. Fund Research also turned to the relationship between the Funds, especially within the family, the spillover effect is one of these relationships. Spillover effect is that fund with outstanding performance will not only bring net money inflow to itself, it would also bring a net inflow of money to other funds, which belong to the same fund family; On the other hand, poor performance may be not only bring net money outflow to their own funds, it may also bring disaster to the family's other funds. Spillover effect is a concept which born in the mature foreign markets. China scholars have research the domestic spillover effect with empirical studies, but there is still a disputation on the existence of spillover effect. Studies on spillover effects mainly focus on the empirical research of spillover effect, reason of spillover effect, the influence and the means of spillover effect. In China, research on the spillover effect is gradually increasing. This article is based on the field, examine the existence of spillover effect of china market with the empirical test, and study the impact of spillover effect.First study the existence of spillover effect of open-end fund in China. Using independent sample T test method compares the 2009 and 2010 Fund's data, found that the spillover effect of star funds do exist in China. However, different from the previous studies, spillover effect simply caused by the performance of fund is not significant in the test; after consider of the size factor, the result of the spillover effect became very significant. From this we can see that the fund investors not only consider the performance of a fund, they will also examine the company's size and strength factor, which for investors is a big step forward. The spillover effects for those who want to use for companies to attract capital inflows, simply to create a star performance of the Fund's approach may be ineffective. Next, this paper studies the impact of spillover effect for investors. That this impact can be divided into explicit part and implicit part and both two parts would do harm to the interests of investors. Subsequently, put forward some countermeasures to these possible impacts and damages, hoping to provide some reference to the development of open-end fund. The end, this article pointed out the deficiencies that may exist in the article and efforts can be do in the future.