The Comparative Analysis Of Different Fund Management Fees

There are many disputes about the management fee of fund in recent years. This problem has two aspects:the one is that fixed-rate management fee is the way which ensures stable yields despite bull or bear market. It means that the company of fund management has a high income whichever the stock market is good or bad; the other one is moral risk and doping-exchange problems in fund industry. These problems are needed to be solved as soon as possible which will affect the development of the capital market. The chapter compares the advantages and disadvantages of fixed-rate and floating-rate management fee in detail, and it points that the two ways are not the best reasonable ones.This chapter establishes a principal-agent model which has two principal and two agents on the basis of the theory of principal-agent and HM model, which is mixed model. The new model has the common advantages of the former two fees, but it has better incentive impact on the fund manager than the fixed-rate fee has and less risk than the floating-rate fee has.Finally the chapter uses the metric way to study the ability of fund manager choosing time and stock at present. The conclusion is:on the whole the fund managers have not the ability that we study. Only 30% ones have the better ability of choosing time, but another ability is not very good.