The Relationship Between The Size And Income Of Open Partial Stock Funds

Open-end fund size in China reaches 3 trillion RMB through fifteen years’development, but the "YuErBao" create a Money Market Fund with a single scale of nearly 400 billion RMB in less than six months, which means the entire industry did not satisfy the inherent demand before. On the other side, the size of the mutual fund industry of USA has reached 13 USD in 2012.Based on the analysis of the mutual funds’ history in China and USA, we point out the constraints of the industry from micro-structural and institutional aspect as well as providing the background for thinking about the tradeoff between scale and yield.This paper chooses unbalanced panel data with 210 selected funds from 2004-2013. We find the existence of a relationship between the size and yield with the form of a cubic function by grouping empirical test. With two methods of relative yield and yield ranking, we obtains that the last yield has a significant positive impact on the current cash flow and individual investors hold a asymmetric attitude towards yield, chasing star fund but showing no significant disgust to junk fund. Furthermore, by studying the size of the average market value of the fund’s top ten stocks, the regression coefficient of fund size to average market value is significantly positive with controlling the ownership concentration and the ratio of non-equity asset which indicates the presence of managers’ picking constraints in the larger scale. And we think this may be an important factor affecting yields.