The Study On Factors Influencing The Redemption Of Open-end Funds

Different from the closed-end funds, the most important characteristic of open-end funds is the fund share is not fixed, investors can decide to purchase the shares or redeem at any time according to the asset allocation and the market trend. In the long-term study of the open-end funds, professors have the conclusion that rational investors will choose to purchase fund according to o performance of the open-end funds, funds with good performance often favored by investors. On the contrary, our researchers conclude that investors will redeem more if the fund has a better performance in China. This phenomenon is bad for the healthy development of the fund market. At the same time, frequent fluctuation in cash flow brings a lot of inconvenience the operation of the fund management company. To meet the large size of the redemptions, the fund manager has to change the previous strategy and make a part of the fund shares into cash. This behavior will reduce the revenue of the fund. So it is important for the fund managers, the investors and the regulators of the securities market to know the influencing factors of the investors’redemption, in order to prevent the irrational redemption.There are six main parts of this thesis. Chapter one is mainly about the history and current situation of Chinese open-end fund market, and a brief introduction of this thesis. Chapter is the literature review, it contains the represent theory oversee and the domestic study. Chapter three is mainly about the current situation of redemption of Chinese open-end fund market. It contains the introduction of open-end fund and the problem in the redemption of the open-end funds in China. Chapter four is about the introduction of the main influencing factors of the redemption of the subject of this study. Including market yields, fund yields, fund dividends, the age of fund, fund size, the concentration of ownership. Chapter five is the empirical analysis on redemption. Chapter six is mainly about the conclusion of the empirical process, and I give some suggestions to the improvement of the fund market.The contribution of this paper is that the open-end funds are classified according to the type of their investment targets. This paper corrects an index of dividends at the same time. But there are some flaws because of the limit by the knowledge. I hope they will be corrected in later studies...