The Vision On Stock-fund Redemption Paradox Of China

Since the second half of 2001, China set up the first open-end funds, open-end fund market in China has gone through nearly 12 years. Different from the closed-end fund to an open-end fund, its unique redemption mechanism, investors can independently may decide at any time to buy or sell fund shares, and greatly increase the flexibility of the flow of capital investment, and thus highly attractive. Mature fund market, the good performance of the Fund to purchase more, therefore expanding the scale to achieve better results, and the poor performance of the Fund has been continually redeemed smaller scale or even shrinking, and finally exit the market, such a mechanism to improve the efficiency in the use of funds to achieve the optimal allocation of resources. Distinct phenomena but in our country, which we call the "redeemed vision", that is, the higher the Fund’s net growth rate higher redemption rate, and some relatively poor performance fund redemption rate relatively low.This phenomenon redemption is not conducive to the stability of China’s securities market, the increase in fund performance, net growth, but it was a large area of the redemption, managers had to sell securities in order to cope with the huge redemption will not only exacerbate the market’s volatility and risk, but will also drive down the price of securities, the NAV decline. Of this phenomenon has led to the phenomenon of the "survival of the fittest and eliminate a departure from the essence of the open-end fund was originally set up, causing the stock market fell, even vicious cycle may occur, but will affect the enthusiasm of the fund management company and the management style, the operation of the Fund have a huge impact, and ultimately affect the personal interests of fund investors.A result of the redemption vision research to find some of the factors that affect the Fund redeemed, and several suggestions conducive to China’s open-end fund is healthier, more long-term development, to establish a proper investment outlook investors also have a significant role.