Research On The Open-end Fund Performance Persistence And Influencing Factors

Fund performance persistence means that the fund with good performance will always be good in the future, and poor one will always be poor, that is, people usually say, "The strong will be strong forever,the weak will always be weak ".Through the fund performance persistence analysis, on the one hand investors can judge whether past fund performance can expect future earnings, then lead the money to the fund with good performance to promote the healthy development of the securities investment market;on the other hand it could restrain the behavior of fund managers’ investment decisions, making their emphasis on the sustainability performance of fund performance to avoid driven by short-term interests of the investment objective.On the basis of fund performance persistence analysis, combined with the current development of open-end funds continuing to explore factors affecting the performance of open-end funds, to determine their impact on fund performance persistence, we can also analyze the development of open-ended funds’ problems encountered in the process, promoting the healthy and orderly development of China’s fund industry.For the development characteristics of China’s open-end funds,we select 20 Stock based open-end funds which are established before 2004 as samples,using Sharpe index as fund performance evaluation,then using panel data regression analysis and parameter method to test persistence performance in 29 quarterly data and to determine the impact of the open-end fund performance persistence of significant factors. Cross-sectional regression analysis shows that the overall persistence performance of China’s open-end fund is not strong,only a few period time have strong persistence performance and even a few periods have reversal performance.Panel data analysis shows that the scale and risk’s impact on the persistence performance of China’s open-more are significant, while ownership concentration,stake are not obvious.This paper will be divided into five parts to expand.The first part is an introduction,including the development of China’s fund industry,research results and significance;The second part is literature review, including the introduction of performance evaluation methods, theory to fund performance persistence and influencing factors;The third part is an empirical analysis of open-end fund persistence performance, including the introduction of research methods, process and results of the empirical analysis;The fourth part is empirical analysis of the open-endfund persistence performance’s factors,including the introduction, process and results of the empirical analysis of panel data model;The last part is the paper’s summary, and proposed recommendations on this basis for investors, fund managers, market regulators.The features of this paper are to select Sharpe index for performance evaluation and to use cross-sectional analysis and panel data analysis method to study the open-end fund performance persistence issues and influencing factors.However, limited by the difficulty of obtaining data, this paper’s indicators are quarterly data, which indirectly leading to less sample period.In this paper, only 20 stocks open-end fund established before 2004 are selected as samples, this problem will affect the stability of the positive conclusion of this article.This paper only considers the ownership concentration,stake, fund scale and the level of risk as factors,while in real investment enviroment fund managers need to consider more, that also reflects the shortage of this paper.