Study On The Way To Chinese Closed-End Funds

Whether from the development of funds in china or in the world, almost all the standardized securities investment funds experienced a " only closed-end funds exist---closed-end funds keep pace with open-end funds ----he open-end funds dominate, closed-end funds decline" three stages of development. Two standardized closed-end securities investment funds -----funds jintai funds kaiyuan were allowed to issue in march 1998,which indicated the arrival of the pilot phase of chinese standardized securities investment funds. Soon the development of chinese closed-end fund entered the fast lane, the number of funds and the amounts of assets under management increased greatly. However, the high-discount closed-end funds as well as the mechanism for the phenomenon of interest caused by transmission problems is widely criticized. With the sudden emergence of open-end funds, open-end fund by virtue of its liquidity and principal-agent mechanism of the strengths of the gradual marginalization of closed-end funds.After 2002, the management has suspended the issue of closed-end funds, all fund management companies also focus on their open-end fund operation, closed-end funds failed in the state of lag. In the meantime, the voice of "close to open" was one after another. Because closed-end funds gradually due to the end of 2008, the number of closed-end funds in China dropped from 54 to 34 (including the newly released six innovative closed-end funds) Since 2007, with the stock market volatility, the shortcomings of the open-end fund to help down or up caused much attention. but with a characteristics of "stable markets, a stable income" closed-end funds re-enter people’s field of vision.A number of innovative closed-end funds in a timely manner and promote more by the majority of investors of all ages.How will the closed-end funds go? Is there no need for the exist of closed-end funds? To research on this issue has a strong practical significance. This article, through two aspects of closed-end funds and open-end funds in the theoretical and empirical comparative study, Theoretical study found that closed-end fund liquidity requirements due to a lower, more conducive to the stability of the securities market; In the bull market, the stock selection and timing ability is also superior to open-end funds;As the share of fixed, less susceptible to the impact of international hot money; Can be leveraged operations, in a bull market can get higher than open-end fund returns; As opposed to open-end fund transaction costs are lower; And you can choose the timing and the sale of the sale price, Thus demonstrated the existence of closed-end funds fund reasonable.Combined with the development experience of foreign countries made the suggestion that the development of chinese securities market according to the status quo to go open-end fund closed-end funds exist side by side roads. Empirical literature suggests that closed-end funds have been better than open-end funds in a bull market in the stock selection and timing ability in the open-end fund, in a bear market to be worse than the open-end funds.In this paper, results of continuous point of starting, using vector autoregressive model for bull and bear markets both cases, closed-end funds and open-end fund’s performance continued to carry out a regression. Evidence shows that performance of closed-end funds and open-end funds in certain period of time have sustained.Since there exists the need, then the problems should be an in-depth analysis of the problems In this paper, comparison with the open-end fund closed-end funds described the phenomenon of a high discount, combined with the previous literature offered the reasons which caused the high-discount ofchinese closed-end funds:Traditional rational factors and investor sentiment, Principal-agent mechanisms and the gradual expiration of the problem, Closed-end funds identified constraints exist in the development of deep-rooted problems.According to the problems, this paper presents a closed-end funds in two way choice:close—to—open and Innovation. However, close—to—open would not be plain sailing as some people had predicted, the painful experience of close—to—open in United States and Taiwan makes us have to note the enormous risks of close—to—open. Therefore we should not blindly copy, but the pilot light of chinese actual first and then steadily pushed。The practice of closed-end funds innovation in China and abroad has made us aware that closed-end funds innovation is a good choice. In this paper,theexperience of foreign innovative concrete measures.Finally, to promote the rapid development of chinese closed-end funds made the corresponding policy recommendations.