| The development history of the Public Offering of Fund in China can date back to 1998.Over the past two decades,the Public Offering of Fund has sustained a great momentum of fast growth.When the Public Offering of Fund has realized sound development and prosperity,the per capita income for residents in China has also achieved leapfrog development with the ever-growing demand for financing.With the unceasing improvement of China’s capital market as well as the diversity of financial products,the major epoch of net-worth financial products for residents’ wealth management is just around the corner.On this background,the investors become more dependent on the Public Offering of Fund than ever before.As one of the most vital networth investment varieties,the Public Offering of Fund has already turned into a significant investment channel for residents to hedge and proliferate their money.Nonetheless,in terms of the residents’ fund investment,there still exists a phenomenon that the fund performance and the investors’ return on investment are skewed,that is,"funds make a profit,while the contrary happens for fund investors".This paper mainly analyzes the non-equivalent phenomena between the fund performance and the investors’ return on investment.By taking the public funds in operation from 2006 to 2021 as the research subject,this paper mainly probes into two aspects,and arrives at the following conclusions through empirical analysis:First,fund performance exerts a remarkable influence on the behavior of individual investors.Confronting different fund performance,individual investors"follow the herd",which is an irrational investment behavior.Namely,they jump in and purchase after a rally has already started,just because the fund performance goes up;they rush to sell after prices start plummeting,just due to the decline in fund performance.In combination with concerned theories of behavioral finance,the behavior of"following the herd" can be explained by the sheep-flock effect,disposition effect,anchoring effect,cognitive bias and the like.Besides,by comparison,the individual investors place more focus on the short-term fund performance,instead of long-term performance,that is,the short-term performance makes a more significant impact on irrational individual behavior.Second,the individual’s irrational investment behavior serves as the dominant factor that gives rise to the non-equivalent phenomena between the fund performance and the investors’ return on investment.Driven by the fund performance in different periods,investors "follow the herd",resulting in the fact that the investors’ real return on fund investment is inferior to the performance contribution of fund products in the corresponding period.In addition,compared with institutional investors,individual investors have less access to acquire information under restrictions of professional knowledge,which can also lead to irrational behavior.In consequence,all of these stand a chance of making an influence on the real return on investment.Overall,based on the above analysis as well as conclusions,this paper also makes recommendations for various investors.Besides,it is recommended to learn from the development path of the American investment advisory industry,take the initiative to promote the advisory services for fund investment in China,jointly build professional third-party service organizations,which can put themselves in investors’ position with a good sense of customer service,step into the shoes of investors to present more investorfriendly solutions,assist investors in fund investment as professionals,enhance the real return on investment,and bridge the gap between fund regulatory authorities and individual investors,so as to render more efficient and investor-friendly services,reinforce communication between authorities and investors,make investors feel better in fund investment,and sustain long-run and sound development of the fund industry. |
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