The Impact Of Fee Structure On The Mutual Fund Portfolio And The Fund Market Capacity

Chinese mutual fund enter a rapid develop era since China carry out its reform and open policy. Since the first mutual fund established in China, Chinese mutual fund chose the fixed fund fee structure, in another word, the investors pay the management fee to the fund co. on the basis of the investment amount rather than on the basis of the achievement of the fund. Such a fixed fund structure in China is not a symmetrical fee structure, and such a fee structure has affected the endeavor degree of the fund manager, the portfolio of the fund manager chosen, the investment amount that the investors inject to the fund market. And such a fund structure also has effect on the usage both the fund manager and the fund investors. Basis on above words, this paper beginning with two opposite fee structure, one is a symmetrical fee structure, the other one is non- symmetrical, then the paper analysis how the fund manager and the investor do and what they can get under the different fee structures. Then the paper make a game that narrate the interaction of the manager and the investors when they face different fee structures. Then the paper design a new fee structure to the Chinese mutual fund.At the second half of the paper, The paper choose ten Chinese mutual funds to analysis how much the new fee structure improve the income of both manager and the investor, and analysis how much the fee structure enhances the fund market capacity. At last, the paper make some advice and suggestion to the further development of Chinese mutual fund.