| After the first open-end fund established in china in 2001,the fund market in china entered a stage of rapid development quickly.Until 2009,the number of securities investment funds has reached 556,and the net value of fund assets has reached 2.68yuan, of which the number of open-end fund is 525, accounting for 94.3% of the number of all funds, and the open-end fund’s net value is 2.56 trillion yuan, accounting for 95.4% of all fund’s net value.Open-end fund has become the absolute protagonist in the fund market in china.The primary open-end fund in china is equity funds, at the end of 2009, equity fund’s share,market value and number was 86.46%,87.26% and 66.98% separately of total open-end fund market.Compared with closed-end fund, the most significant characteristic of open-end fund is its purchase and redemption mechanism.The purchase and redemption mechanism gives the investors the freedom to purchase and redeem open-end funds based on its performance.In general, investors prefer to purchase the funds performed well and redeem the funds performed poorly. The freedom of purchase and redemption attracts many investors but also makes the fund’s share is constantly changing.When the fund’s share is changing violently, it will have a very negative impact.First, the sharp fluctuation in the shares increase the fund manager’s difficulty to operate the fund.When facing with a huge purchase, the fund manager will shortly bear a great investment pressure.When facing with a huge open-end fund redemption, the impact will be more severely, if the fund’s liquid assets is not sufficient to meet all redemptions, the fund manager will have to sell stock, and the huge stock sell-off makes the stock price decline, and then the net value of the fund declines.The decline of the net value of the fund will prompt the investors to redeem more.Open-end fund is one of the most important institutional investors on the stock market, the huge stock sell-off or huge stock purchase will no doubt bring the stock market into volatility, which regardless of for investors or for the healthy development of stock markets are both unfavorable.Deeply study of the purchase and redemption of open fund issues is not only good for investors also for fund managers and security regulators.For investors,it can help them to establish a correct concept,and for the fund managers,it can help them to operate the fund more easily,and for regulators,it can help them to take the initiative to adopt some specific policies related to avoid volatility in the stock market, and effectively protect the interests of investors. This paper studies the purchase and redemption issues of open-ended fund through studying the change in open-end fund’s share.This article includes five parts:The first part is the introduction, it mainly describes the background and significance of the topic, and it also introduces what this paper studies is equity fund investor’s subscription and redemption issues and the method used during the research.The second part is the literature review.Literature review consists of two parts, foreign literature and domestic literature, foreign open-end fund market has a long history,and there are more researches on the purchase and redemption of open-end fund.According to the different literature contents,this article divides foreign literatures into different kinds:1.The impact of the stock market trend on changes of fund shares; 2. Research on impact of fund performance on investor behavior; 3. Study of the impact of the dividend on the redemption; 4. Study of the impact of the costs of the Fund on the redemption; 5. Research of the relationship between changes in the Fund’s share of and the fund’s size; 6. Study of the impact of the survival time on subscription and redemption 7. Study of the other factor that influence the Fund’s subscription and redemption.The open-end fund started later in china, and the data is relatively small, with the same time,study of the open-end fund relatively lacks.The third part is analysis of factors that influence stock fund investors’ purchase and redemption behavior.This section first briefly discusses the concept of open-end funds, advantages, as well as the theoretical basis of open-end fund,and the open-end fund’s development in china.And according to research findings of scholars’at home and abroad, this paper sums up the factors that influence the Fund’s subscription and redemption are:the Fund’s own performance, stock market trends, fund dividend, the Fund’s purchase and redemption fees, the Fund’s brand, fund investors’structure, the Fund’s concentration on stocks,changes in fund shares lately.Finally, this section analysed the present situation of stock fund and its purchase and redemption in China.The fourth part is empirical analysis of factors that influence stock fund investors’purchase and redemption.With analysis in the third part,this section first introduced the hypothesis in the empirical test, a clear explanation of variables and explanatory variables.Explanatory variables are the net growth rate for the Fund, stock market returns, dividend funds, fund size, the survival time, the Fund’s concentration on stocks, changes in the shares in last quarter, rate of change of fund shares as dependent variable.Among the many factors mentioned in the third part, only Fund’s purchase and redemption fees and the structure of investors were not introduced into this model, because open-end fund subscription and redemption costs have little difference between the different funds and the period of existence of the Fund.and the constant variables can not explain the changing rates of change in the share, and data of structure of investors is disclosed once a year and other variables fourth a year, if we adopt this factor,test.After the variables were clear, the paper selected 60 equity open-end funds,with information during early 2004 and the end of 2010 as the sample data.From descriptive statistics,we first obtained variables:the mean, variance, maximum,minimum.Followed by a multiple regression, we got the following conclusions:First, the change rate of Fund’s share in the previous quarter and the change rate of Fund’s share in this quarter was not significant related, "herding" in the equity open-ended fund investors is not obvious; Second, the change rate of Fund’s share and dividend in this quarter and last quarter showed a positive relationship; third the size of the Fund and the change rate of Fund’s share is not related, the size difference will not be considered during making purchase and redemption decisions; Fourth, the Fund’s existence time and the change rate of Fund’s share is not related and equity fund investors do not prefer the old fund; V, the change rate of Fund’s share and the net growth rate is positively related;Sixth, the Fund’s net growth rate last quarter impacts the fund’s share negatively, but the impact is not very significant;Seventh, rate of change of fund shares and stock market trend this quarter is positive related, but not related with last quarter’s stock market trend.Eighth, the Fund’s concentration on stocks and the change rate of fund shares is negative related, but the effect is not particularly significant.Finally, in order to eliminate correlation during factors on fund shares the paper also conducted a stepwise regression analysis, and got that dividend in this quarter and last quarter and the net growth rate in this quarter are the most significant factor that influence the Fund’s subscription and redemption.The fifth part is the conclusions and policy recommendations.According to the theoretical analysis in the third part and empirical results of the fourth part, the paper made some suggestions to the three main body in the open-end fund markets:fund investors, fund management companies and securities regulators.Recommendations for the fund investors are:to establish a correct concept of fund investment, strengthen the study of securities investment funds knowledge; choose the fund with relatively stable share;choose the fund with relatively high dividends and stable net growth rate; when choosing the fund,considering the number of factors.Recommendations for the fund management company are:to create a good fund performance and maintain the continuity of performance; to develop a reasonable dividend policy; focus on the stock market and macroeconomic policy; enhance investor education,and give investor behavior proper guidance.The recomendations for the securities regulatory authorities are:emphasis on fund investor education to raise investors’ awareness of the open-end fund to help investors establish the correct concept of fund investments; improve the information disclosure system, and improving the frequency of information disclosure; to strengthen the securities market building and promoting innovation of financial instruments to broaden the scope of fund investments.The innovation of this paper is a more comprehensive presentation of the various effects that influence the Fund’s subscription and redemption, and empirical analysis consists of factors can be quantified.During empirical analysis, in addition to the multiple regression, it also used forward selection and backward delete to do stepwise regression and obtained more accurate results. Sample data included information of 60 representative stock funds representative during 2004 January 1 and December 31,2010 all. Compared with previous studies, the sample data had a relatively large time span, in this period of time, the stock market experienced a bull market, bear market. The empirical results are more convincing.Of course, since my theoretical level is limited, although the study of factor that influence the Fund’s subscription and redemption is more comprehensive but this is not deep, I hope that deficiencies in this paper can be corrected in the future. |
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