The Study On Impact Of Fund Splits On The Purchase And Redemption In The Open-ended Fund Market

After the establishment of the first open-ended fund in2001, China’s open-ended fund market has a rapid development. The types of investment of the funds have been also enriched. There are stock funds, bond funds, Money market funds and Hybrid Funds. The number of investors in China is increasing, and the investors of funds are composed of individual investors. Individual investors have the characteristics of frequently purchase and redemption. Fund splits in China have begun in2005, the number of fund splits reaches its peak in2007. Fund splits have no substantial influence on the assets and liabilities, but have ones on the purchase and redemption of behavior of fund investors. This dissertation studies the impact of fund splits on the purchase and redemption in open-ended fund market.This dissertation is divided into five chapters.In the first chapter, research background, significances, methods and technical routes of the influence of fund splits on the purchase and redemption in open-ended fund market. And it also systematically elaborates domestic and international literatures on effect.Chapter Two reviews the concepts of fund splits, stock splits and fund dividends, and the situation of fund splits in China, describing the mechanism of purchase and redemption of open-ended funds and Influence factors of purchase and redemption.Chapter Three focuses on the relevant the behavioral finance theory. Firstly, it gives an overview of behavioral finance. Secondly, it focuses on the behavioral finance theory, including availability bias, anchoring, Prospect Theory, Transaction utility Theory and noise trader.In Chapter Four, empirical research and analysis of causes are studied on the influence of fund splits on the purchase and redemption in open-ended fund market. Firstly, it uses147funds relevant quarterly data from2007to2011, finding significant positive correlation between fund splits and the purchase and redemption of funds. Secondly, the behavioral finance theory is used to explain the reason of the influence of fund splits on the purchase and redemption.Chapter Five gives several suggestions and proposals for the government supervision, fund managers, and individual investors.