The Research On Effect Of Investor Trust On Mutual Fund Flows

Behavioral finance originated in western countries and has played an important role in explaining investors' irrational behaviors.In recent years,the research on trust has entered a new period.Trust,especially investor trust,has begun to draw academic attention to its value in financial markets.In fund market,investor trust is crucial for the principal-agent relationship between fund investors and fund managers.Investor trust is an act of seeking psychological security,affected not only by the impact of negative events,but also the impact of neutral events on the level of fund managers.The changes of fund flows show the changes of investor behaviors.From the perspective of behavioral finance,this paper studies three shocks breaking the trust of investors,namely fund manager changes,fund management company equity changes and fund scandals,and studies the impact of trust destruction on fund flows.This paper uses the multi-regression model of non-equilibrium panel data and studies the short-term and long-term effects of investor trust on fund flows with different types of funds,taking the common stock funds,the mixed funds with partial shares and the medium and long-term pure debt funds established from the third quarter of 2004 to the second quarter of 2017 as samples.The empirical results show that there is a trust relationship between the investors and managers in common stock funds and mixed funds with partial shares.The demission and replacement of fund managers,the equity change of fund companies and fund scandals will all lead to net outflows of fund flows in the short term(half a year).In the long term(one year),the influence of fund manager demission and fund scandal on fund flows is still significant,but the influence of fund manager replacement and fund company equity change is no longer significant,indicating that among several trust shocks,the influence of fund manager demission and fund scandal on fond flows is larger.In addition,due to the low risk of bond funds,there is not an effective trust relationship between fund investors and fund managers for medium and long-term pure debt funds.Investor behaviors do not depend on investor trust in fund managers and fund management companies,so trust shocks will not significantly cause investor behavior changes,confirming that risk has always been a key element or premise for trust.This paper studies the impact of investor trust on fund flows.Firstly,it can guide investors to make more rational investment decisions.Secondly,it can provide a basis for the management behavior of fund management companies,reducing the liquidity of investors and maintaining a stable and long-term trust relationship with investors.Thirdly,it request regulators and fund management eompanies to pay more attention to the quality and integrity of information disclosure,so that investors can make more accurate judgments and reduce blind fund subscription and redemption,improving the maturity of China's fund market.