The Impact Of Fund Flow On Fund Performance

With the rapid development of China’s public fund market,the types and number of public funds have increased significantly.Some of the "star funds" are popular with investors.Investors hope to entrust their own funds to the fund manager for investment,in order to obtain higher fund returns.Therefore,this paper discusses the relationship between fund flow and fund performance,and studies the impact of fund flow on fund performance and its mechanism,which has implications for the construction of China’s fund market and the investment behavior of fund market participants.This paper combines theory with empirical research to study the impact of fund flow on fund performance,and analyzes the mechanism of fund flow affecting fund performance from the perspective of fund risk transfer.The results show that:(1)investors in the public fund market in China have the investment behavior of chasing the rise and killing the fall.When the historical performance of the fund is good,the flow of the fund will increase;(2)There is no "smart money" effect in China’s public fund market.In the bull and bear market,when the fund flow increases,the fund performance will deteriorate;(3)The fund flow affects the fund performance by influencing the fund risk transfer behavior.The fund risk transfer behavior has intermediary effect,and has different effects in different market cycles;(4)Compared with mixed funds with partial shares,the return of common equity funds is more affected by the fund flow,which is related to the high proportion of shares held by common equity funds.The research results of this paper provide enlightenment for fund investors and fund managers,and provide reference for the construction of China’s public fund market.Fund investors should improve their investment ability and avoid the behavior of chasing up and killing down;Fund managers should establish the concept of value investment,and contribute to the trust of fund investors;We will improve China’s fund market supervision system,establish an early warning mechanism for fund investors’ redemption behavior,avoid the changes in fund flow from having a greater impact on the investment decisions of fund managers,and establish a systematic evaluation system for investors’ risk tolerance,so as to bring investors a better experience of fund holding.The innovation of this paper is that it opens up a new perspective to study the relationship between fund flow and fund performance from the perspective of fund risk transfer behavior,and applies the intermediary effect model to the study of the impact of fund flow on fund performance for the first time.