| Open-ended funds, as the main force of China’s capital market, are developing at a rapid rate. Driven by the growing capital market, it has attracted more and more investors. However, the shortage of managers for public funds and their high turnover has brought challenges to fund management of fund companies. According to organizational behavior theory, difference in management structure leads to different investment decision-making process and methods. Would the difference in single management or team management structure make any difference on investment style extremity and performance for Chinese open-ended funds?Based on the theory of organizational behavior, this paper studies on a sample of 1986 Chinese stock-preferred funds during 2005 to 2012. In order to find if there’s any evidence to support diversification of opinions theory or group shift theory, this paper investigates the difference of investment style and the performance extremity between funds managed by team managers and single manager by comparing the investment style extremity, investment concentration in industries, fund performance extremity and risk in theoretical analysis and empirical study. In this paper, a subsample of team managers’ characteristics is also studied on the relationship between characteristic diversity and investment styles, fund performance. Results which support diversification of opinions theory show that funds under team management follow less extreme investment styles, and their portfolios are less industry concentrated and thus acquire less extreme performance compared with funds under single management. There is no strong proof indicates that characteristic diversity of team managers exert any significant effect on investment style extremity, industry concentration and performance extremity. Additionally, funds under team management shows lower risk which indicates that team management structure owns stronger risk control advantages while single management shows better performance. |
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