Research On Liquidation Risk Of Open-end Fund In China

Open-end fund becomes the lead of the fund industry in the world for its unique advantage different from the close-end fund. But the advantage of free redemption also leads to the unavoidable liquidation risk. In particular cases, liquidation risk will increase and even result in liquidation crisis. So taking effective measures to keep away and control the potential liquidation risk of open-end fund is a difficult but compulsory problem in theory and reality. The open-end fund is new in our country, but the liquidation risk is obvious for the particularity of the capital market. Catering for the development of open-end fund, this thesis focus on the liquidation risk of open-end fund from the view of establishing alarm mechanism, trying to provide some valuable advice and thoughts to develop and prefect the liquidation risk controlling of open-end fund in our country.The thesis is composed by six chapters. In chapter one, some fundamental conceptions such as open-end fund, liquidation risk and alarm mechanism are explained. In Chapter Two, the reality basis of establishing alarm mechanism on liquidation risk of open-end fund in our country is presented, and the current situation on liquidation risk of open-end fund as well as the problems in China are concisely stated. In Chapter Three, the basic theories of liquidation risk of open-end fund are explained, and the theories about alarm mechanism for reference are expatiated. In Chapter Four, a detailed liquidation risk analysis of open-end fund is presented comprising the analysis of investment risks, capital management risks and investor behavior risks. Then the according alarm index are established. In capter five, a new system based on alarm mechanism is suggested to cope with the liquidation risks confronting open-end fund. In chapter six, the viewpoints of this thesis are summarized.