An Empirical Study On Performance Evaluation Of Equity Open-end Funds

In September 2001, the HuaAn Funds set up China’s first open-end securities investment fund. Along with China’s economic well-development, growing people’s income and other factors, open-end funds, with its scientific management, risk diversification, benefit-sharing and other features become a popular and important asset allocation tool for investors.With stock open-ended funds has become a pillar of the investment fund market rely on its good expansion, providing a more versatile investment tools for investors. Meanwhile, the fund companies as institutional investors have injected vitality into the stock market, but due to the size of funds is too large, its purchase and sale behaviors in the stock market, not only make a huge impact on the single stock, even enormous fluctuations in the market. Our researches have long focused on the fund performance, mainly considering the factors about the ability of security selecting and market timing,investment style,managers replacement,and so on,yet the turnover rate of funds rarely mentioned.Therefore, research of active equity funds’ turnover rate as a key variable will reveal further operations on its net asset value of the fund and the impact of market fluctuations. This article will probe into active equity funds’ turnover from many points of view, combined with the characteristics of the funds, in order to achieve more scientific and rational evaluation value of investment funds.This article selected 2005-2013 active equity funds’ as the study sample,Hushen 300 index as the market portfolio benchmark and One-year deposit rate as the risk-free interest rate. Considering the funds’ level of return, risk-adjusted returns, ability of security selecting and market timing, fund size, fund investment styles and other factors will have an effect on the correlation analysis between fund turnover and performance, in order to provide new ideas and advices for research, investors, fund managers and regulators.Our research shows that: 1. Open-end Fund in most instances was able to beat the market benchmark, but insists the long-term investment philosophy does not mean getting better returns; the trend of China’s A share market is highly correlated with the fund performance and has a significant effect on the fund performance; fund cannot obey with the investment style it announced, so it does not have reference value.