An Empirical Study On The Factors Affecting The Sustainability Of China 's Open Bond Funds

As a major part of the securities and fund industry, mutual fund gradually becomes an important financial tool in China’s financial industry. It’s an important channel for the public investors to invest in the capital markets, coupled with a lot of advantages such as portfolio risk diversification and expert management. The mutual fund industry in China started relatively late compared to the mature markets of Europe and America, and the pilot of the closed-end fund began in1998. However, it has expanded rapidly in recent years with the development of China’s securities market. Performance persistence of mutual funds, also known as the hot hand effect, refers to the relative performance of a fund’s performance is consistent at different times, that is, the better the performance of the fund now predicts the better performance in the next period.The empirical analysis is divided into three main parts to answer these questions. Firstly, we focus on the open-end bond funds established prior to2008as research objects, followed with the introduction of related Western theories and researches and a review of the domestic factors research of open-end funds performance persistence. The paper uses relative performance rankings of the comparable same type funds as performance benchmarks, has continuity test for data of2008-2012. Combined with macroeconomic situation, interest rates movements, the basic situation of the funds, and the fund managers’ characteristics, the article constructs panel data regression analysis of the impact of the open-end bond funds performance factors, and hopes to provide some recommendations for investors’ fund investment options.The empirical analysis results show that the size, the exact type, the management system of the bond funds, and the study experience of the fund manager played important role in the fund’s performance persistence. This shows that we could predict the future performance of a fund according to its historical performance, and we can thus observe the fund’s performance between different time periods to find some certain regularity, so that history will repeat itself.