Flow-performance Relationship Of Fund In China Under Bull And Bear Stock Market

With the rapid development of China’s economy, the scale of securities capital market is expanding. Because open-end fund’s purchase and redemption is flexible and convenient, so it has been a basic tool for investors. The influence of open-end fund is also rising in the capital market. To study investors’ behavior characteristics on the performance of the star fund and dog fund, this paper chosen the data of common stock funds from the first quarter of 2005 to the third quarter of 2014 as the sample. The standard in this paper to determine the star fund and dog fund was 20%. And considering the influence of the stock market cycle, this paper used the general linear regression method to assess the flow-performance relationship(FPR) between star fund and dog fund in the empirical research.The conclusions of this paper are as follows:(1) under the ―bear market‖, the FPR of star fund is significant positive, the FPR of dog fund is not obvious, the behavior of investors on the performance of star fund and dog fund is significant asymmetry.(2) under the ―bull market‖, the FPR of star fund is significant positive, the FPR of dog fund is significant negative, the behavior of investors on the performance of star fund and dog fund is significant asymmetry. To test the robustness of empirical results, this paper used two methods: subsection regression method and 10% new standard.The results shown the empirical results had good robustness.The results of this paper have positive significance to the development of fund market. According to the main research conclusions, this paper put forward several suggestions for fund regulators, fund managers and fund investors.