Star Funds,Market States,and Fund Flows

Under the current era of great changes,economic transformation and capital market transformation,China’s asset management industry has ushered in unprecedented development opportunities.As a pillar investment product of the asset management industry,the fund is an important force serving the real economy and wealth management of residents.Since the birth of the first open-end fund in China in 2001,the open-end fund is very popular with investors.After more than 20 years of development,it has become the mainstay of the securities investment fund industry.Based on the current situation,it is of great significance to study the behavior of investors in the fund market in the new era,pay attention to the influence of "stars" in the industry,and analyze the information implicit in the phenomenon of stars,regardless of whether it is investment to investors or sustainable development of the industry.The investor structure of China’s fund market is dominated by individual investors.Individual investors have irrational behaviors,are keen on investing in star funds and have the phenomenon of "idolize".There are three main reasons why stars attract investors to choose them: First,the brand effect is prominent.Second,investors’ attention is limited.Third,the low cost of obtaining information.To sum up,Star Foundation influences the choice of investors,and then influences the change of fund capital flow.In view of the unstable performance,sharp rise and fall of our country’s stock market and the relatively long consolidation period,the market performance will have an important impact on the psychological expectations of fund investors.According to behavioral finance theory,investors’ irrational behaviors include overconfidence,disposition effect,etc.Previous studies have shown that with the change of market cycle,the investment behavior of investors presents obvious differentiation.Specifically,when the market is good,investors tend to have overconfidence and ignore the potential gains brought by market factors.When the market is poor,the degree of loss aversion and risk aversion of investors will increase,resulting in disposition effect,which tends to redeem the fund with good performance in the previous period.Then,when the market returns rise or fall sharply,the market risk rises sharply.Because the investors’ attention is limited,the investors will re-allocate their attention and spend a lot of energy to research and judge the market conditions at the cost of reducing the attention to the star fund.At the same time,when the market changes,investors’ expectations of star funds will also change.Firstly,this paper carries out theoretical analysis,mainly from the three aspects of fund performance,star funds and market conditions to study the impact on investors,and the relevant literature on the analysis of changes in investors’ behavior under the interaction of star funds and market conditions,which is generally summarized,summarized and commented.At the same time,the principal-agent theory,reputation theory and limited attention theory are explained and analyzed to build the theoretical framework of this paper.Then,in the empirical test,taking the relevant data of stock-based funds and partial hybrid funds from 2005 to 2020 as samples,an unbalanced panel data model is established to quantify the star fund FPR.The main conclusions of this paper are as follows:(1)For the relationship between the performance of star fund and capital flow,the FPR of "star" fund selected by the media is positively correlated,and our fund has "star effect",which can significantly improve the fund capital flow and attract investors to purchase.(2)In the neutral market,the star fund’s performance is more attractive to investors,who pay more attention to the characteristics of award-winning funds than fund management companies.In the neutral market,some small-scale fund management companies are more likely to adopt the "star-making" strategy and concentrate their resources to create a "star fund".(3)Under the non-linear relationship of3)FPR,the performance of star fund will also significantly affect its capital flow,i.e.the performance of star fund and its capital flow have a convex positive feedback relationship.In the neutral market,the convexity effect of star fund FPR is more obvious.Finally,this paper makes recommendations for fund management companies,fund investors and fund supervisors based on the research conclusions.