Open-end Securities Investment Fund Performance And Stock Selection And Timing Capability Study

A-share market went through a violent process from 2014 to the beginning of 2016 in our country. There are several reasons for the peculiar phenomena of stock market, that is, "short-term ups and long-term downs". One crucial reason is that most of the shareholders of Chinese stock market are personal investors. To promote a healthy and long-term development of stock market, a new group structure, of which organized investors take crucial part, must be fostered. Meanwhile, a robust fund performance system and the assessment of the ability of fund managers in choosing stock and right time can help personal investors to make a wise choice. As a result, it is of vital importance to have a thorough study of fund performance and fund managers' ability in choosing stock and right time.This thesis use the standard of the amount of increase and decrease of the Shanghai securities composite index and separates the period between April,2014 to January,2016 into three stages, namely, fluctuation stage, rising stage and descending stage. Besides, it analyzes the changes of the open fund performance and the ability of choosing stock and appropriate time among these three stages, and predicts potential reasons for the usage of investors. During the assessment of fund performance, for one thing, we use not only the four classic assessment methods, that is, Sharp Ratio, Treynor Ratio, Jason Ratio and Information Ratio, but also Kendall Concordance Coefficient to verify the consistency of these four methods. For another, we introduce two dummy variables to improve the Fama-French model, and compare the fund performance between the rising stage and the descending stage. As to the study of stock-choosing and time-choosing capacity, we use not only three typical methods, namely, T-M, H-M and C-L, to study, but also improved T-M Fama-French model to compare the stock-choosing and time-choosing capacity between the stock rising period and the stock descending period.We choose 40 sample funds,20 of which are the top twenty stock management companies. The scale of these twenty stock management companies accounts for 62% of the whole stock market. And from the research we did, we got four conclusions:Firstly, from the Kendall Concordance Coefficient, we can see that Sharp Ratio, Treynor Ratio, Jason Ratio and Information Ratio have high consistence; and from the account of the three typical methods, T-M, H-M and C-L, we can say that the ability of choosing stock and appropriate time and the four methods we used are reliable.Secondly, from the two improved models we use, the accounts we got are more concise.Therefore, it has some certain reference value.Thirdly, the fund has got high yield rate in the fluctuation stage and rising stage.Meanwhile, the fund managers had generally showed the good ability of choosing stock, but were short at handling the time.Fourthly, the fund's yield rate in the descending stage is obviously lower than market benchmark portfolios. But the market at this stage is Pudie stock market, systemic risk is high. Compared to the other two periods, funds performance goes down widely, so at this time, investors should choose the low-risk fund. The results show that the capital market investors are immature. When emerging markets plummeted, investors irrational. will exacerbate the market volatility.Based on these four conclusions, we give two pieces of advice as follow:The first,strengthen the cultivation of the investors,gradually cultivate institutional investors.And we must improve the risk awareness and concept of value investment of the personal investors.Through improving the fund performance evaluation system, guide the personal investors invest in funds, to stabilize the capital market.The other, perfect financial tools,and lower the risk.The regulator authorities should encourage creativity to hedge systemic risk and to build a healthy and long-term capital market.There are two innovations in this article:The first one, this article has comprehensively used various methods,traditional or typical, to study different stages of the funds, and used the improved Fama-French model to analyze the performance changes as a basis for the personal investors.The second one, using three typical methods, T-M, H-M and C-L, to study the changes of the fund managers' ability of choosing stocks and selecting time.