A Comparative Study Of Investment Income Between Institutional Investors And Individual Investors In China

From the violent fluctuations in China's securities market in the last decade,it has been widely observed that the investment behavior of institutional investors is still not mature enough in China compared with that in developed countries.Similarly,the institutional investors also use positive feedback trading strategies,as individuals do,providing evident herd behavior and disposition effect,which bring about doubts towards the investment ability among institutional investors.In order to figure out whether institutional investors have stronger investment ability,this paper studies this by combining theoretical analysis with empirical analysis.Firstly,this paper theoretically analyzes the behaviors and benefits between institutional and individual investors.It shows that institutional investors have positive effects on their investment income,both positive investment behavior and negative investment behavior,on the contrary,the investment behavior,acted by the individual investors,impinges adversely on a negative their investment income.In addition,this paper studies the present status and changing trend of the shareholding structure of various investors in China.It finds that the proportion of shares held by general corporate investor is 61.35%,so they have become the major parts in China's securities market.However,there is still a 5% shareholding gap between the professional institutional investors and the individual investors.As for the individual investors,the proportion of small retail investors with stock market value less than one million RMB is gradually decreasing,while the proportion of big retail investors,whose stock market value is over ten million RMB,especially more than one hundred million is steadily increasing.After analyzing its variation tendency,it is predicted that the shareholding ratio of institutional investors will continue to grow up,and the proportion of individual investors will step up to decrease.To a large extent,through event study method,this paper empirically examines the investment income of professional institutional investors and individual investors,which indicates that the profit made by institution is distinctly higher than that of individual.In terms of the ability at judging the time of stock selling,institutional investors also do better.Finally,this paper puts forward suggestions for the conclusions of theoretical analysis and empirical analysis.