A Continuous Study On The Stock Selection Ability Of China Xia's Hybrid Open-end Funds

By the end of December 2016,there were 3,867 funds in our country,and the total amount of assets under management was 9159.305 billion yuan,including 3,564 open funds and 85252.94 billion yuan of assets under management,accounting for 93.08%.In the open-ended funds,the hybrid fund was 1707,accounting for 47.9%.Since August 8,2015 formally implemented new fund operation management measures,the stock fund holdings from 60% to 80%,the upper for flexible configuration,avoid position limits,at the same time,in order to simplify the process,many stock type funds will have to change to mixed type fund operation.Mixed type fund in our country main types for partial shares fund,most of fund assets invested in the stock market,so its performance mainly depends on stock selection and market timing selection ability,and space of hybrid funds by positioning the ambassadors fund stock selection ability to reflect more obvious,so choose stock selection and market timing selection ability to research and its sustainability for fund management companies,investors and relevant regulators has very important practical significance.In this paper,through studying and drawing lessons from domestic and foreign research based on existing stock selection and market timing,selecting the widely used TM-FF3,HM-FF3 model,transfer matrix method and the total constancy index to analyze the period from January 1,2014 to December 31,2016 the huaxia fund management company’s 16 hybrid open-end funds’ stock selection ability and market timing selection ability persistence according to study requirements to pick the daily and the weekly return data frequency from three different angles about the overall situation,different market conditions and the continuing situation of semi-annual to conduct a comprehensive analysis.Based on the empirical analysis,this paper draws the following conclusions:Firstly,TM-FF3 and HM-FF3 model to sample fund data have a better fitting effect,TM-FF3 and HM-FF3 are suitable for studying stock selection and market timing selection ability,and the empirical test of both the results obtain highly positive correlation.Secondly,the sample funds basically do not have positive significant selectivity ability,even the sample fund has a significant negative market timing ability,under the TM-FF3 model with only one sample funds also have positive stock selection ability and timing ability,therefore,it state clarly professional investment management ability of sample funds on the whole is relatively poor.Most of the sample funds cannot be obtained exceed the benchmark performance results,most of the sample funds bear a high risk and can only obtain lower income,its professional investment capacity needs to be improved.Thirdly,in the rising prices,falling prices and market volatility three different market range,the sample funds not have significant positive selection ability,and cannot according to the sample fund to provide a basis and reference to other investors in stock investment.Timing ability in different market performance have obvious difference,followed by market shock,rising prices and falling prices,that sample funds more easily grasp the short-term fluctuation in market trend,through the band operation to obtain better benefits,timing ability in market decline performance is the worst,the fund is also difficult to predict the termination interval of rising prices,coupled with systemic risk of adjusting the portfolio of the fund will take some time as well as position limit,so that the sample fund cannot effectively deal with the market decline risk;Sample funds in two or more of the continuous market have significant stock selection ability in three different prices,but the ability of choosing stock and timing with time and chance,showed no obvious continuity under different market conditions.Fourthly,the ability of most of the sample fund’s stock was not persistent in two consecutive periods,and lasting a maximum is four semi-annual,from the index of a significant point is not ideal,only to maintain three semi-annual sustainable funds in the sample fund’s stock selection ability is obvious and have certain professional stock investment capacity,but with the market change it is difficult to maintain;the number of funds has continued market timing selection ability in two consecutive timing is relatively stable,but the number was significantly lower than the number of stock picking ability continues,and the sample funds are more likely to have timing ability in rising market trend,when the market fell into the sample funds have shown little good timing ability;The ranking fluctuation range of stock selection skill is bigger than the market timing selection ability,but from each sample fund stock selection,the stability of the ability is stronger,although both have a reversal effect in different periods,which can be more from good to bad condition.