Chinese Mutual Fund Managers’ Decision Making In The Context Of Economic Crisis:an Empirical,Comparative Analysis

Based on the empirical study of Chinese mutual fund industry, this thesis studies the decision making process of mutual fund managers in the light of behavioral finance theories. Moreover, it concentrates on testing disposition effect in decision-making process. Disposition effect describes the tendency that investors sell winners (profitable investments) soon but hold losers (investments which are suffered a loss) for a long period. According to previous studies and researches on disposition effect, basically it’s proved that Chinese individual investors display dispositions effect. However, is it also hold true for institutional investors? If so, what are the influential factors? Endeavors to answer these questions, this thesis provides empirical insights into the behaviors of Chinese mutual fund managers using semiannual and annual reports of open-end equity funds during 2006-2012. By making reasonable assumptions,38,742 selling transactions are calculated out of 178,251 records in order to test posed hypotheses. Later, on the basis of previous researches,2 statistics are established to measure disposition effect respectively. They are average holding period and PGR/PLR ratio. More specifically,3 questions are tested by these two statistics, including:the existence of disposition effect in Chinese mutual fund industry; disposition effect in the context of financial crisis; and the influences of gender difference on disposition effect.It is proved by empirical studies that:generally speaking, Chinese open-end fund managers display statistically significant disposition effect. Moreover, it is also found investors are more easily to realize their loss investment during the financial crisis. Finally, it is discovered that the female mutual fund managers are more likely to exhibit disposition effect.