The Infuence Of Open-ended Mutual Funds On IPO Underpricing

As an anomaly of the efficient market hypothesis, IPO underpricing exists in every financial markets of the world, high IPO underpricing can partly illustrate the inefficiency of pricing, it can not fully reflect the intrinsic value of listed companies. In recent years, security investment funds have rapidly developed, make it become a very important investor in the security market, attracted many theory scholars and industry investors study on it.As the largest professional institutional investors, can open-ended fund affect the IPO underpricing? If it has an influence, how will it work? Based on these questions, this paper is to study on how the characteristics of Chinese open-ended fund will affect the IPO underpricing. Samples studied in this paper contain all new IPOs in Chinese market during 2006-2014. Using the multivariate linear statistical regression model, to study how the participation, age, size, historical performance and the holdings of open-ended fund can affect the IPO underpricing; then according to the market, separate samples into two categories, to study more, also according to the category of the open-ended fund, the study still verifies the robustness.The empirical results prove that:the participation of open-ended fund can reduce the rate of IPO underpricing; the older the fund is, the lower underpricing it will generate; bigger scale open-ended fund can make lower IPO underpricing; the greater performance of fund, means the lower IPO underpricing; hold more shares, can effectively reduce the IPO underpricing; more open-ended fund participate in the ration of IPO can also reduce the rate of underpricing. The result is still noteworthy in the robustness test.Even so, there is still many other can be discussed in this paper:firstly, such as the choice of sample interval, failed to cover the whole IPO samples in our country. Secondly, this paper only simply studied for the influence open-ended fund have on IPO underpricing, did not explain how it happens, just put some possible explanations according to the practical experience, this is also the direction of further research in the future.