Fund Network Location,Fund Flow And Fund Risk Selection

China’s public offering funds with long-term investment and research precipitation,active management power,information disclosure and other advantages,the total number and scale of funds continue to rise,the position of funds in the industry and the competition between funds is becoming increasingly fierce.Based on the portfolio theory,the fund manager will adjust the proportion of the fund’s portfolio in time according to the changes of the market.Based on the rule of information disclosure of China’s fund market,you can see fund managers always adjust portfolio holding positions and investigate its the motivations behind,it is not only based on the theory of principal-agent,the principal-agent problem between investors and investment managers,fund managers is to adjust the asset allocation in order to attract more capital inflows,gain more benefits;but also have information advantages.As professional investors,fund managers have more information than individual investors,including the amount of information they acquire and the ability to process information.They will proactively adjust their positions to reduce the risk of their funds under management and have a high asset management ability.The existing research on fund investment network mostly adopts the form of co-holding shares or cross-shareholding which can highlight the advantage of fund information acquisition to establish fund investment network.However,with the deepening of the problem,the concept of information advantage includes both information acquisition advantage and information processing advantage.Therefore,it is necessary to further deepen the network construction mode.At the same time,it is of great significance to explore the motivation behind the change of fund position from the perspective of network.Based on the research samples of stock and mixed partial stock funds in China’s open-end fund market from 2008 to 2018,this paper studies the influence of fund network position on fund flow and fund risk selection from the perspective of fund investment network,behind the change of fund position,it is usually have the motivation.The first one,this paper establishes a new way of fund investment network model which different from the existing one which adopts the co-holding of fund shares or cross-holding to establish the network,this paper innovatively adds the co-holding of fund shares and co-holding changes to establish the co-holding and co-holding changes to increase and decrease the network respectively.The Second one,the influence of fund network position on fund flow is discussed,and the fund flow is divided into subscription,redemption and net flow indicators,trying to explain whether the motivation behind the change of fund position is based on fund principal-agent problem.Then,the influence of fund network position on fund risk selection is discussed,so as to explain the motivation behind the change of fund position in two-way network.Finally,based on the empirical research conclusions of the above two parts,relevant policy suggestions are put forward for different market players.The conclusions of this paper show that:(1)The information advantage behind the fund is quantified through the establishment of the network of the same direction of the change of the mutual shareholding position.The funds located in the intermediary position and with more structural holes have more information benefits and control benefits.(2)Fund investors will make subscription and redemption decisions following the change of the holding shares of fund managers in the intermediary position and with more structural holes.The more important the network position is,the greater the influence on net flow will be,and the net flow will be affected mainly through the redemption mechanism.The network position in the increase network is positively correlated with the net flow of the fund,which plays a role in attracting capital inflows.However,in the network of reducing holdings,network positions are negatively correlated with net flows.Although investors will follow the behavioral choices of fund managers to meet their behavioral preferences,fund managers do not achieve the purpose of attracting additional capital inflows by adjusting their positions.(3)The more intermediate the fund is and the more structural holes it has,the less risk it will choose in the future.It is explained that in conclusion(2),although the funds with important positions in the reduction network have not achieved the purpose of attracting capital inflow,they have achieved the purpose of reducing the risk of the funds under their management.In this paper,the risk selection of fund managers is defined in a certain time window so as to provide some reference for the long-term investment of risk-averse investors.(4)In the sub-sample study considering the investment style of the fund,the effect of the network position on the fund flow is not significant in the short term,but the effect of the network position on the risk selection is significant in the long term,which provides some reference for investors with different styles.In order to test the robustness of the conclusion,this paper adopts the transformation of main variables,omission variables,transformation regression method,sample regression and other methods to repeat the findings of the main part of the paper,and the results show that the conclusion of this paper is robust.Possibly this paper can make some contributions to the following aspects:firstly,from the way of network construction,the author innovatively adds the factor of coorientation of position change to establish the network of shares jointly held by the fund and the coorientation increase and coorientation decrease of position change respectively.It not only enriches the way to build a fund investment network but also supplements the quantitative research on the fund information advantage.Secondly,theoretically,it enriches and develops the existing research on the m echanism behind the change of fund position.Then,the risk index is defined in a certain time window to provide a reference for investors’ long-term investment.Finally,the investment style of the fund is considered to provide investment reference for investors with different style preferences.