Study On China Open-end Equity Fund Managers

As a kind of fund which sharing profits as well as risks among investors, it not only attracts institutional investors but also ordinary people. Since the first open-end fund went to public, open-end funds attracted much attention and became main stream in financial market. Now it plays a more and more important role in China’s financial market. According to different investment objectives, open-end fund can be divided into stock fund, bond fund, money market fund, mixed fund and so on. The stock fund views stocks on public as main investment objectives. China’s stock market experienced bull market, bear market, volatility from year2004to year2011. As a result, stock fund fluctuate simultaneously with the stock market. No matter under which conditions, the ability of fund managers to gain profits is the concentration of investors’target.In order to find the true ability of fund managers, this paper choose Carhart four factors model to study the performance of open-end stock fund. I calculated the size factor, value factor, momentum factor in Carhart four factors model. Based on my research, I found that Carhart four factors model is a kind a good model to explain return of open-end stock fund in China. However, scale factor and value factor can’t account for the performance of open-end stock fund. Generally speaking, we didn’t find stock fund has extra profits over market benchmark according to research on202open-end stock funds. There are many bad performance fund managers as well as good performance fund managers in the market. In view of possible problems in parameter estimation, I use Block bootstrap method to further study the real ability of fund managers with good performance. Further study provides evidence that, good performance of fund managers depend not only luck but also skills.This paper provides fund managers and investors a new way to evaluate the performance of fund. It is important for investors to find fund with extra profit and fund managers to get good control of its fund. At the same time, the value of four factors in Carhart four factors model pave the way for further study in this area.