Determination Of The Optimal Management Fee Of China’s Securities Investment Fund

The securities investment fund industry is an important part in China’s financial system, its position and role in the financial markets has gradually increased. In recent years, the number of securities investment funds in China continue to rise, the rapid growth in the number of fund management companies, but the fund performance is difficult to make the investors optimism.2011Fund Report, securities investment funds as a whole, a loss of500.4billion yuan, this situation is related with the stock market systemic risk, but fund management companies have got more than28.8billion of the management fee income during the same period, which is in sharp contrast with the results of operations. If we attributed funds poorly managed due to systemic risk is not acceptable. This paper attempts to explore this issue from the institutional arrangements of the fund management company fees.As the important Institutional investors, the fund management company has the nature of the principal-agent relationship. In this case, the interests of fund holders and fund managers are inconsistent, incomplete information and asymmetric information makes the client always faced with the moral hazard of the agent. A reasonable institutional arrangement is particularly important in the context of the fund holder bearing fund operating losses. Although the institutional arrangements of Chinese fund management industry in general reflects the basic principle of incentive compatibility model, but Whether the fixed management fee and incentive coefficient can achieve the fund managers and fund holders consistent with the interests is worthy of study.By studying of domestic and foreign scholars’ research, this article describes the history and characteristics of China’s securities investment fund industry, the development process and other aspects of fund management fee. Build incentive compatibility model of the fund management company, get the theoretical solution of the optimal excitation coefficients and the optimal management fee, and prove the effectiveness of the incentive. Then, based on the results of theoretical analysis, the actual data of2006-2011, China’s fund management companies as a sample, using the panel data analysis methods, establish the incentive compatibility panel model and the best management fee of Chinese securities investment fund is given. Finally, on the basis of the empirical results,the paper proposes the policy proposals.