Research For The Investment Reference Value Of Open-ended Equity Fund Rating In China

With the rapid development of public fund market in China, more and more fund has received favor of investors. Because mutual fund market in C hina starts late,individual investors account for the main component, individual investors who lack of relevant professional analysis capabilities general select fund by its past performance and star rating. However, the fund’s future performance actually plays a decisive role in investment decision,this raises the question that fund rating reveals the fund’s future performance to what extent. So the study on the investment reference value of public fund rating is very important to investors.The main part of this paper has five chapters in total, from the start of analyzing the relationship between fund rating and the fund’s subsequent performance in China, this paper puts fund rating index into the analysis in the form of dummy variables in combination with other control factors affecting the fund’s performance, discussing whether fund rating has investment reference value or not.The first part is an introduction, including the research background, research significance, research methods and research framework, innovations and shortcoming.The second part is mainly to review the previous literature about direct and indirect studies on the fund rating investment reference value, summarize the findings and the status quo, learn research ideas and methods, and find defects in the domestic research methods. It helps to improve and innovate, and find the breakthrough and research methods for this paper.The third part is the theoretical assumptions and model design of this article. This article firstly proposes the theory analysis and assumptions that fund rating has investment reference value and it is possible to play a positive role in the subsequent income. Then select the current fund performance which is portrayed by the net growth rate and Sharpe ratio respectively as the dependent variable of this model, and select Galaxy triennial rating index which is portrayed by four dummy variables as explanatory variables of the model, and select fund expenses, fund size, survival time, and stock market capitalization share as control variables of the model. Finally, the paper briefly describes the classification and tests of panel data model.The fourth part analyzes the empirical results of the model. Firstly, we select 75 open-end equity fund or partial shares fund as samples in the period from January 1, 2009 to June 30, 2015. Secondly, conduct descriptive statistics to overall fund public and sample fund to learn about its market size and structure in recent years, analyze the change trends and change characteristic of sample fund. Then conduct unit root test, F test and Hausman test to choose the type of panel data model, and ultimately the model panel data model is determined as variable intercept model which is time- fixed. Then conduct regression analysis to sample data in the quarterly, semi-annual, annual, 18 monthly and 24 monthly time span respectively. Finally, the results of the regression analysis come to the following conclusions:(1) Open-end equity fund and partial shares fund don’t show a strict “winners repeat” phenomenon in the short-term, medium- term or in the long-term.(2) Five-star funds can show high returns in the short term, outperforming other stars.(3) The excess return to one-star and subsequent performance of three-star fund are very similar to five-star fund’s.(4) Buying public fund in reference to fund rating is still at risk, investors should be objective to the reference value of the fund rating.