Research Of Joint Shareholding And Cross-subsidy Strategy Of Fund Families

With the deepening of financial reform and the development of China’s financial markets,the fund industry has flourished and the scale of fund management companies in China has also increased.Therefore,fund families have increasingly become organizations that cannot be ignored.In order to scale up,fund companies may adopt cross-subsidy strategy and subsidize some funds,boost their performance and construct star funds,so as to attract more capital inflows for the whole fund family by spillover effect.This family-owned strategy is not conducive for the capital market.Therefore,it is of great significance to explore the motivation and approach of the implementation of the cross-subsidy strategy.Based on fund performance-capital flow convexity theory and high-profile funds’ spillover effect theory,this paper adopts indicators of China’s equity funds form 2014 to 2010,innovatively quotes the fund evaluation data of China Securities News,Haitong Securities and Galaxy Securities,and introduces high-profile fund virtual variables and fund co-holding variables to test whether there is a spillover effect of high-profile funds in China’s public fund market,and examines the implementation motivation and specific path of the cross-subsidy strategy.The research found that:(1)The spillover effect of equity funds exists in China’s public fund market.(2)The spillover effect of high-profile funds is the motivation for fund families to implement cross-subsidy strategy.Also,crosssubsidy strategy is also the specific path for fund families to carry out profit transmission.(3)The implementation of cross-subsidy strategy is largely due to the joint shareholding behavior of fund families.Based on the research conclusions,this paper puts forward suggestions from the aspects of strengthening the supervision for fund families,standardizing fund evaluation,and strengthening education for investors.