China’s Open-end Securities Investment Funds Investment Style Analysis

In securities investment funds, open-end fund is the mainstream variety. The open-end fund market in China is developing Constantly, the fund number and size are growing, the species are also increasingly complex. In October2000, the China Securities Regulatory Commission promulgated the "open-end securities investment funds pilot approach", then three open-end funds Huaan innovation, China growth, steady growth in the South have been established, marking the open-end fund officially boarded the China Securities market stage. After several years of development, the development of open-end securities investment funds have made great achievements. Deadline to March,18,2012,China’s total number of open-end funds is953, equity funds422, hybrid funds180,234debt funds, currency funds82,ETF connected Fund39; ETFs Fund39; LOF Fund77;74closed-end funds,13in Shanghai,61in Shenzhen; innovative142.From the foregoing, the open-end securities investment funds account for a large proportion in the securities investment funds, and the open-end funds have a large proportion of equity funds, so the study of equity open-end securities investment funds will has a very significance, so this paper focus on itRecently, the the Fund’s investment style research uses two methods, Holding-Based Style Analysis method and Return-Based Style Analysis method. Return-Based Style Analysis method is relatively simple and more importantly, to yield relatively good data collection, scholars mostly use this method to study the fund’s investment style, China’s domestic situation is even more so. Therefore, the innovation of this paper is the use of Holding-Based Style Analysis method to compensate for the defects of the country studies in this respect. In addition, I use yields and sharp index to measure the fund performance in order to enhance the persuasiveness of this study.The main content of this paper are:the introduce of the concept of open-end fund, the concept of open-end fund investment styles, as well as the main methods of the open-end fund investment style analysis. In the empirical part, the paper first use of portfolio-based analysis method to analysis the open-end fund’s absolute investment style, actual investment style. I find there is some discrepancy in the declared style and the actual investment style convergence, but in a different market,actual investment style show different characteristics;then I find that from the yield point of view, the open-end fund’s relative investment style is the same with the actual declared; and then I try to test the duration of the open-end fund investment style persistence,the result is that the duration of the open-end fund investment style persistence is half of a year. After the empirical part, I make some analysis for the conclusions of this paper, then I suggests a series of countermeasures. The conclusion:the Fund’s investment style declared in the prospectus is not right; the fund managers are free to change the fund style, making the fund management companies and other funds rating agencies can not make a scientific and rational performance evaluation for them. Therefore, the fund managers should adhere to the original investment style during the investment of the fund. As for regulators,they should strengthen the supervision of listed companies, for investors they should be mature investors in terms of investment philosophy.