Research On The Star Brand Strategy Of Chinese Fund Families

Today, the fund management companies have become the important participators of China’s securities investment market, and funds have also become an important investment choice for investors. To make a deep study into the business strategy of the fund families and the operation regulations of fund market, we can make better protection on the interests of investors and improve the operating efficiency of the whole capital market. Firstly, this paper study the relationship between the cash flow and performance from the fund family and fund individual level respectively, following an analysis of the existence of spillover effect and star effect of star fund, as well as the effectiveness of star strategy and operational mechanisms of fund families.This paper uses a combination of methods of quantitative analysis and model test. Firstly, We analyzes the relationship between the cash flow and fund rating from the fund family and fund individual level respectively, proving the existence of the star effect and spillover effect for star funds. Then, we build a logit model to study the existence and effectiveness of the star strategy of families. Finally, we study the cross-subsidization in fund families in order to thoroughly investigate the star strategy of fund families.In this paper, we study innovatively the effect of jointly holding on star strategy for families, and explore the specific operation mode of the star strategy from the perspective of cross-subsidization. In addition, this paper also analyzes the differences of behavior of the fund family and investors in different market environments.To sum up, this paper mainly gets the following results:(1) We document that there is a strong positive star effect and spillover effect for a star fund. (2) Fund families adopt star strategy to take advantage of the relationship between cash flow and star performance. Family jointly holding can enhance the ex ante odds of producing stars to a larger extent than the factors of cross-fund return standard deviation and number of member funds. (3) We suggest the existence of cross-subsidizations in fund families, moreover, common shareholders of family members and large number of member funds can improve the flexibility of cross-subsidization, and also the cross-subsidization can lead to a higher cross-fund return standard deviation in a certain extent, These study provides strong evidence to explain the relationship between family characteristics and the probability of producing stars.