The Research On Fund Manager's Investment Behavior And The Relationship With Fund Performance

Security investment fund is an important instrument of promoting and acceralating security market's healthy and steady development. As well, security investment fund, a representation for institutional investors, is of vital importance to the consummation of listed companies'governance structure. When more and more capital is invested in funds, fund managers as the key person in fund operation, their value has been enjoying growing favor, whose investment behavior will have much impact on fund performance to a great extent. So far, researches on fund managers have mainly focused on their abilities of market timing and stock picking and trade behavior. Under the circumstances of Circulation of State-own Shares, this paper emphasizes the influence that fund manager's investment behavior exerts on fund performance with the analysis of the factors affecting fund manager's investment behavior at first. The paper tries to find out: What kind of factors will affect fund managers'investment behavior and how? How fund manager's investment behavior impacts fund performance? How to regulate fund manager's investment behavior?At first, the paper expains how original characteristics and derived characteristics would affect fund performance. The evidence from the regression of multiple and fixed effects model demonstrates that funds'abnormal return of last year, depreciation rate, unit net asset and fund manager's working experience have close relationship with fund performance, aomg which, the former three factors have positive relation. Fund managers are more likely to adopt active investment strategies, choose optimal investment portfolios to acquire better performance. However, fund managers with longer working years prefer to conservative strategies for the sake of reputation and stable performance. Additionally, fund age and turnover rate have negative impact on performance.Secondly, allowing for the particularity of the system of fund management fees in China, the paper explores the effect management fees exerting on performance separately. The model derivation shows that the logarithm of management fees'size has significantly positive relationship with fund manager's risk choosing. The research documents that this linear incentive covenant results in a lower pay-out level of portfolio managers than what investors expect. When the risk-aversion degree of portfolio managers is higher than that of investors, the risk level chosen by the former will be higher than the latter expect.