Study On Asset Allocation Decisions Of Securities Investment Fund

Securities investment fund is the most major institutional investors in the securities market.Asset allocation, market timing and security selection are three main tools commonly used in portfolio management. Asset allocation is the main determinant of the long-term return on investment. Asset allocation is that which can make the income situation of different categories of assets linked to the risk appetite of investors, and then construct the optimal portfolio at a certain level of risk. The reason why asset allocation is considered to be the main determinant of the long-term return on investment is that good asset allocation can greatly reduce the risk of fund investment, and effectively control the possibility of extreme investment losses occurred. Thus, the nature of securities investment fund management is to achieve long-term excess returns by reasonably controlling and diversifying risk based on optimization asset allocation and the establishment of efficient portfolio.However, now, China still can not afford to reduce the risk of securities investment by asset allocation.Fund institutions are underperforming in the stock market.Since the financial crisis in the United States, China’s stock market fell sharply,China’s fund industry suffered heavy losses.Therefore, the study on asset allocation decisions of securities investment fund not only has important practical significance to the development of qualified institutional investors but also has important practical significance to safe and stable operation of stock market.This article includes three parts.They are asset allocation processes, asset allocation practices and asset allocation case.The first part is about process of asset allocation. This section firstly analyzes the influence of the life cycle of investors, investor demand for liquidity and liquidity characteristics of asset, capital market environment, the investment period and the tax to securities investment fund asset allocation decisions. And then on the basis of this, it specifically describes the procedure of securities investment fund asset allocation, including formulating investment objectives, choosing asset classes, determining the proportion of portfolio standard configuration, selecting investment approach and rebalancing configuration.The second part firstly shows that the investor’s investment model is gradually improved with the change of the economic environment by describing the changes of American investors’investment patterns. Secondly, the detailed analysis of the insurance companies, social security funds and sovereign funds which truly implement the operation of asset allocation, illustrates that all classes of asset have economic environment preferences.Certain assets may behave well in certain economic environment, but in other economic environments may underperform. So in investment practice, because different investors face different economic environment, asset allocation preferences of different investors are completely different.It reveals the status of China’s asset allocation of securities investment fund.The third part is a specific case of insurance companies, which describes the process of asset allocation decisions of securities investment fund in detail. It firstly describes the procedures and policies of insurance company’s securities investment fund asset allocation in general. After that, it takes a specific insurance company as a case, describes the procedures, policies and influencing factors of its asset allocation in detail by using specific numbers. Through the detailed description of the insurance company’s securities investment fund asset allocation, people can have a more concrete understanding about securities investment fund asset allocation.The innovation of this paper is the combination of the integrated existing theories about investments in securities and other theories,the summary of the different characteristics of the relevant categories of assets,the analysis of the relationship between risk and return expectations of the different kinds of assets,the distinction of decision-making methods of the macro, meso asset allocation,the analysis of the relationship between the categories of asset allocation and related disciplines (macroeconomics, portfolio investment and other). This paper provides an important theoretical basis for asset allocation decisions of securities investment fund.It is China’s current situation and prospects of the Fund Development that make us select to study asset allocation decisions of securities investment fund. I hope the results of this study can make people have a more concrete understanding about securities investment fund asset allocation, and pay more attention to research of securities investment fund asset allocation asset allocation. At the same time, I also hope the results of this study can play a role in the development of China’s investment fund industry.