The Empirical Study On The Performance Evaluation Of China’s Securities Investment Fund-Taking Open-end Stock Funds As Example

China’s first two funds-the Wuhan Securities Investment Fund andShenzhen Nanshan Securities Investment Fund were established in1991.Thestandardized Funds-Kaiyuan Fund and Jintai fund were established in1998.The first open-end fund-Huaan Innovation Fund was issued in2001.Commercial banks began to set up funds management companies in2005,and the rules that allowed the closed-end fund to turn to open-endfund played a part in the funds market. Although China’s securitiesinvestment fund industry has a short history,it has got rapid expansion.Now our investment product kinds are rich, the scale of investment areexpanding, and the investment environment is very standardized. However,we can easily find that the performance of each securities investmentfunds is very different.What is the reason to cause the phenomenon andhow to compare the performance of two securities investment funds? Thesequestions are also the motivations for choosing this topic.At first,I summarized the theoretical basis and specific methods ofthe fund performance evaluation, then I introduced the China’s fundmarket,finally the performances of44open-ended equity funds established prior to December31,2005were evaluated in a period ranging from2006to2012.I used the factor analysis method and selected seven performanceindicators including the income of the fund, the fund risk, the fundrisk-adjusted income, the fund expenses, the fund manager personalempirical capacity, the fund asset allocation and the fund size. Theresults showed that the income of China’s securities investment funds,risk, risk adjusted returns, the fund manager’s personal ability are notideal. In the factor analysis method,five factors including fundinvestment income, the fund size, the fund manager’s timing ability, thefund asset allocation and fund risk could cover the93.28%of theinformation, and the most important factor is the fund investment income,and the fund size, the fund manager’s timing ability, the fund assetallocation and the fund risk are followed. Finally, based on theseconclusions, this paper gave some recommendations to promote thedevelopment of the fund market.