Innovation Of Investment Fund And Development Of China's Fund Industry

Investment Fund is an investment instrument characterized as portfolio investment and experts management. In the history of financial development , banks, securities, insurance, option, credit card, net banks and so on are all milestones in innovations in financial instruments, which really matter in economics. Investment Fund is such a milestone that it promotes breakthroughs in financial theories and innovations in financial institution.Presented as a innovation in financial instrument, investment fund witnessed a development process of over one hundred and thirty years which was a process of unceasing innovation as well. It is well because of it's unceasing innovation that investment fund presents increasingly important status and widespread influence .This paper, based on the analysis of general principle of innovation in investment fund ,explores new thinking of innovation in finance in our country, which is constituted of six parts as follows :Starting with innovation in finance and it's theories, The first part conducts general analysis of innovation in investment fund. Investment fund is a new financial instrument depicting remarked character of innovation in finance since it was born. Owing to itself s continuous innovation, investment fund shows no signs at present of ceasing to rise and ends with weighing heavily in the international capital market through the development of more than one hundred and thirty years. Therefore, to study innovation in investment fund ,we must start with innovation in finance. Economists as W.L. Silber put up their own viewpoints on the original impetus of innovation in finance from different directions which led to the formation of many schools of theories of innovation in finance. Compared with others, investment fund, an innovation in finance, shows off such aspects as innovation in management mechanism, innovation in funds operating manner, innovation in risk management, innovation in financing means and innovation in equity creation and so on. Based on the analysis above, this paper discusses investment fund from three aspects, that is innovation in product, innovation in organization and innovation in management.The second part discusses innovation in product. Innovation in product of investment fund is a very important factor in promoting impetuous development of fund industry which expands itself all along at the request of financial market and with the changes in economy and finance. Innovation in product of investment fund breedingsome purposes and deep background connects close with the changes of economic and financial environment and market demand, which has also a close relationship with epoch, investors' preferences, degree of perfection and openness, substitution product of financial investment and innovation in financial instrument continuously emerging in international markeSu.v Birth of any new fund product reflects character of epoch and is the result of it. As for innovation in fund product, we have such modes as horizontal innovation in investment fund product, vertical innovation in investment fund product, exploitative innovation in investment fund product and derivative innovation in investment fund product.The third part analyses innovation in organization of investment fund. As for contractual type fund, though it could curtail expense concerning the operation of fund corporations, owing to lack of institutions on behalf of fundholders, so under the condition of dispersion of fund share, two scenarios is often seen, one is fundholders have difficulty in expressing their willingness which as a result weakens their supervision over fund managers, the other is that it is very likely for fund managers to harm the interest of fundholders if fund managers exert too much attention to their own interest. Especially, it is extremely difficult for fundholders of contractual type fund to change fund managers. By contrast, corporate fund can successfully coordinate interest among those related to investment fund through drawing in modern co...