The Impact Of Securities Investment Fund On Stock Price Volatility

The mutual fund appears as a result of the capital market achieves high development. In the international capital market, the institutional investors improve a lot and gradually occupy the dominant position during the process of financial market’s deepening and financial instruments’ innovating. Because of its advantage in collecting and utilizing information and having a very professional research team, so the institutional investors probably find the true value of the securities and engage in value-investing. It has been proven in the mature capital markets that the stock market’s fluctuation will get weaker when the institutional investors get stronger. Although there are only more than twenty years history to stock market in China, It has made the rapid development and become the second largest stock market in the world. However, It causes many tough problems during the process of stock market’s development, such as abundant speculation behavior, low market-effectiveness and strong volatility etc. In order to solve the problems in the stock market, the regulatory authorities proposed to accelerate the pace of the institutional investors’ development. Beneficial from the authorities’ support, the institutional investors have made great achievement from then on and gradually take up the main position in the stock market. But the institutional investors’ enormous development doesn’t weaken the fluctuation in the stock market, so more and more people question the function that institutional investors act in stabilizing the market. There are also many empirical and theoretical research in this field. This paper utilizes the time series econometric methods to modeling the related date after 2005,and the result shows that the enhancement of the institutional investors’ strength increase our stock market’s volatility. This research would be conducive to authorities making some effective policies to improve the stock market’s current situation.