The Relationship Between The Performance Of Funds And The Population Characteristics

Under the rapid expansion of economics in China after the initiation of Reform&Opening, Chinese capital market has been developing into maturity since its birth. Various funds greatly facilitated this process. A fund is a type of collective investment, by which professional management, profit sharing and risk partaking is accomplished. As a novel investment instrument, fund has advanced greatly recently in China, following growth of the capital market and buildup of awareness and demand of the mass for investment. The national Assets of management for Public Offering of Fund held2,100billion China Yuan by the end of2011. Most studies regarding fund presently in China focus on performance evaluation, rather than direct investigation of fund managers. Nevertheless, it is fund manager that handles a fund firsthand and determines its performance. For a common investor, choosing a fund is choosing a fund manager for the most part, which necessitates fund manager as a research focus. In this work, the correlations between personal characteristics of fund managers and performance of funds managed by them were explored by setting up a series of variable based on population background characteristics of selected fund managers.This research on the relationship between performance of funds and population background characteristics of their managers bears significant benefits for investors, fund management companies, fund managers and for those who are dedicating themselves to such a career. It can help investors more easily identify the personal characteristics of the fund managers that they favor and make wiser choices for the right funds. Similarly, it can help fund management companies select more competent candidates to manage their funds if appropriate personal characteristics of fund manager are introduce to recruitment standards. Reciprocally, this work can help fund managers recognize the defects to compensate and the merits to foster in their personal characteristics. At last, for those who would like to be a fund manager, these characteristics can show them right path to follow and strive after on their way towards this career.In this article, an empirical research was conducted on the performance of Chinese equity open-ended fund using regression methods, based on studies destined to elucidate the association between fund manager and fund performance throughout the world. Chinese equity open-ended funds of which the managers have not been changed during a certain accounting year from2003to2011were selected as research subjects. Ten index characteristics of fund managers (sex, age, educational history, university superiority, multi-disciplinary background, professional qualification, time engaged in securities, occupation, number of funds managed) were categorized into four population background groups and set as independent variables, whereas Sharpe ratio and standard deviation of risk were set as dependent variables and time since fund establishment, comprehensive strength of fund management company, number of funds under management company, time of establishment of management company, maturity and stability of management company as control variables. Significant correlates were found between time engaged in securities/Sharpe ratio, age/Sharpe ratio, time engaged in securities/standard deviation of risk, age/standard deviation of risk, number of funds managed/standard deviation of risk and professional qualification/standard deviation of risk, all of which were correlated negatively.