The Performance Study Of Chinese Qualified Domestic Institutional Investor

With China’s accession to the WTO and the large number of powerful state-owned groups have entered overseas markets, China’s QDII system came into being and became China’s demand for capital market liberalization policies under the transitional. On September6th,2006, the State Administration of Foreign Exchange issued a notice about overseas securities investment fund management company issues related to foreign exchange management, which noticed that the fund company required conditions may apply for overseas securities investment business. Until November2nd,2006, China’s first pilot QDII fund, Hua An International Balanced Fund, which is issued by Hua An Fund Management Company. Its starting size of197million USD was the largest one among QDII products that issued in the same period. During September to October,2007, the first batch of QDII equity funds have begun to issue, including South Global Select Fund, Huaxia Global Equity Fund, Harvest Overseas Chinese Equity Fund and the edge on the JP Morgan Asia Pacific Equity Fund. This marked the QDII funds to start operating in China formally.Since the pilot QDII fund issued formally in2006, the market has experienced the process changing from a bull market, low to the recovery. In effect, the development of QDII funds also experienced the five stages, including the early planning, expand the pilot, and accelerate the development of depression in the doldrums and the gradual recovery. Compared with the rise of QDII funds, Taiwan’s overseas fund market has long thrived since1988. Its size and number have a more substantial growth. Because Taiwan’s overseas fund managers engaged in international investment for a long time, their investment performance has been inferior to Foreign Asset Management Companies, however, the performance of QDII funds and Taiwan Overseas Fund are still some gaps. The development process of QDII Fund and Taiwan Overseas Fund is similar and Taiwan and Mainland investors have similar investment preferences. On these two points, QDII funds and overseas funds in Taiwan have a strong comparable. Thus, this article will evaluate the performance of QDII Fund and compare it with Taiwan Overseas Fund at the same time. What is more, in order to complete the short that the first two empirical analysis of fund performance are failed to optimize the performance of QDII Fund, the article also uses DEA model analyzes the performance of the QDII Fund from the perspective of efficiency effectiveness to provide a way to improve the performance of the QDII Fund.Through this series of empirical the study has found that experience in international investment income for the QDII funds have a major impact and benefit for controlling non-system risk. According to the issue-time, this paper divided QDII funds into three groups, including Old Funds Group, Less New Funds Group and New Funds Group. From a point of investment style, less new QDII funds group prefers a more stable investment style. QDII fund’s exposure is not able to obtain positive excess return, therefore, its performance is not satisfactory.In additional, compared with the Taiwan Overseas Fund’s performance evaluation indexes, the study found that risk-adjusted returns of Taiwan Overseas Fund is better and more sensitive for the market volatility than QDII Fund. Comparison of the mean yield further proves that the importance of overseas investment experience. After understanding the performance of QDII funds, using the function of projection analysis, the DEA model replenish possible performance improvements methods for QDII funds performance. I believe that the performance of QDII fund research provides a clearer direction for institutional investors, let individual investors more in-depth understand QDII funds, reduce the risk of the single market for individual investors and to share the global economic growth, but also provide a reference for policy formulation.