An Empirical Study On The Relationship Between The Expense And The Performance Of Open-end Stock Fund In China

From March 1998 the company established its first fund,the number of the fund company in our country has reached 283 by the end of 2014, China’s fund industry has gone through 17 years.During this period, the fund industry have gone through the initial stage of confused exploration, through the explosive growth of the bull market phase, went to the diversification of the current stage of the competition. Investors ’s prejudices to the funds rate gradually concentrated on the fee of fund.Along with the increasing number and variety of funds,and the intense competition in the fund industry, at present,simple structure of the fund expense and single fee rate of the fund is no longer suitable for the current development of China’s fund industry,and investors have not been satisfied with the present open-ended funds rate structure and fund fee level. the relationship between the persons who participate in the open-end funds can actually be explained by the principal-agent theory.The attorney and the principal and have different objectives when they cooperated. They share different information and the agent have more information. In order to effectively protect the investor’s interest, this paper will discuss the relationship between the stock open-end fund fee and the performance.The main significance of the paper is to demonstrate rationality of fund fees.This study hope to be able to achieve the following three objectives: one is the investor can choose a higher rate return of open-end fund through they observe the Stock open-end fund expense; two is to provide the fund company for a basis for the design of more rational rate level and rate structure of the open-end fund, so that it can improve the income; the three is to provide a reference for the regulatory agencies fund regulatory to reform of the open-ended fund, and it is conducive to the development of China’s fund industry norms.This paper firstly describes the meaning, ideas and methods of this writing, and then review the literature home and abroad.This paper also describes the theoretical basis of the open-end fund expenses.And then, this paper summarizes all fees of open-end fund. The open-end fund fees can divided into two categories. The first one is the fee paid by the investor when they purchase fund.it includes load charges, redemption fee, conversion fee, dividend reinvestment fee and account management fees. The other one is the operation charges. It includes management fees and host fee, 12B-1fee, operating fee, the performance fee and sale service fees.The conclusion of empirical study suggest that there is a negative correlation between open-end equity fund operation expense rate and the performance;but obviously there is no correlation between stock open fund expense rate and the performance. Finally, this paper put forward the corresponding countermeasures and suggestions to investors,fund company and fund supervision institution on the basis of empirical study.