Chinese Open-end Funds' Investment Style Research

Along with Chinese security investment funds growing and developing, the funds tagged their own styles when they were issued, especially when the open-end funds appeared, the funds' investment styles gradually diversified ,among them,value-based, balance-based, growth-based were three important styles. Funds' investment styles refleced the strategy and philosophy in the process of building a portfolio, different investment styles formed different levels of risk and benefits which reflected the fundamental interest of investors. However funds' managers often changed their investment styles in practice,which seriously damaged the interest of investors, whether the funds' managers could accord the practice styles to the contract described or not was becoming an important research topic. At present the research on Chinese open-end funds' investment style was very little and we often used one evaluation method, as each method had its own limit, this article using two types of analysis methods had important theoretical significance.This issue began with the funds' investment style theory and behavioral financal theory, then lead to the method of pre-analysis and after-analysis, The analysis of American Investment Company(ICI)was the main method of pre-analysis.The after- analysis contained Sharp's Returning-Based Style Analysis (RSA) and MoonKin's Holding -Based Style Analysis (HSA).Because of the model conditions, the paper selected 16 eligible sample datas to do empirical analysis. In the after-analysis the paper firstly used RSA model, EVIEWS statistical software to calculate each sample's average investment style, the result showed that the changes rate reached as highly as 75% .Then the paper used HSA method to analysis sample funds' each-stage styles, HSA results also showed that 75% of the funds didn't meet their pre-investment styles, two analysis methods were 81% the same. In order to better clarify reasons why the funds changed their investment styles, the article introducted the rate of industry concentration and stock concentration. The results showed that Chinese stock market, funds managers' herding behavior were the main reasons for the change of investment styles.Because the funds developed in recent years, the research on funds' investment style involved very little in our country, this subject was new; In the empirical study this article combined the RSA analysis with the HSA analysis to demonstrate the funds' investment styles, the results would be more accurate; At the same time this paper selected S & P CITIC company's pure style index as a benchmark index , there was innovation in the selected variables.The funds' investment style was a new area of research, the funds' investment style was the basis of the funds performance, whether the funds consisting on their investment styles or not determined the investors' interests. There were a lot of problems waiting for our research on funds' investment style in our country, such as how to establish a more scientific comparison basis, how to form a unified division standard and so on. With the study of funds' investment style going depth,the Chinese funds' industry would continue to mature and improve.