The Research Of Chinese Open-end Fund Management Fee

China established the first fund company in March1998and there had opened73fundcompanies at the end of2012. China Fund has gone through nearly15years. In this shortperiod of15years, the fund industry has gone through a fumble confused in the initialstage, through the explosive growth of the bull phase, went to the current diversifiedcompetition stage. With the continued depression of stock market, investors begin to havemore and more prejudices to fund companies. The discussions about funds rate graduallyconcentrated on a hot question. On the other hand, with the rapid expansion of the fundindustry, the more complex products, more incentive competition, the investors don’tsatisfied with the current open-end fund fixed management fee structure. They require fundcompanies design new fund rates for them to keep their profits.This paper analyzes the U.S. and China’s policies on the Fund’s rate options, theelements of rates making and other aspects of the measurement methods. By comparing thetwo different rates, referencing U.S. funds industry mature system and combining withChinese current fund market environment, the author proposed fund management fee fromthe current flat-rate system to a floating rate system and develop a fee structure for fundwhich is very suitable for Chinese market. When change the fund management fee from afixed rate system to a floating rate system, we should also consider performancebenchmarks floating. This paper researches and develops a reasonable management feecharging system which not only can change the fund companies’ service attitudes, relief theconflicts between fund holders and fund companies, but also further encourage fundcompanies and fund managers, emphasizing their social responsibilities and missions. Itlets them to stand in view of investors in stead of standing on the perspective of expandingproducts. Therefore, this method can make Chinese fund industry become healthier andplay a positive role to keep growing stably.