Research On The Impact Of Investment Style Drift On The Performance Of Open-end Funds

China’s open-end fund industry has experienced rapid development in recent years.Whether in terms of quality or quantity,China’s open-end fund industry has a leap-forward improvement.Faced with a wide range of fund products,most ordinary investors,due to their limited investment level,often understand the style of the fund according to the description of the fund’s investment purpose and investment concept in the fund’s recruitment instructions,and use it as an important reference for making investment decisions.However,in the real operation process of the fund,a large number of funds have real investment style which is not consistent with their claimed nominal style,that is,investment style drift,which brings difficulties to the majority of ordinary fund investors in selecting funds to meet their needs.At the same time,will the performance of open-end funds change because of the drift of investment style? Will it improve or weaken the performance of funds? Therefore,it is self-evident that it is important to study the style drift of open-end securities investment funds and its impact on fund performance.After sorting out the influence of fund style,style drift and drift behavior on fund performance,this paper elaborates the theoretical basis of style drift behavior.Then 427 open-ended stock funds are selected.Firstly,the nominal investment style of the sample fund is obtained according to the investment idea and investment purpose stated in the sample fund’s prospectus.Then,the appropriate style asset factor is selected to decompose the return rate of net value of the sample fund by using Sharpe strong model,so as to judge its actual investment style and compare the nominal style.The lattice confirms whether the drift occurs.It is found that there is a drift in investment style of open-end funds in general,and most of the actual styles of funds deviate from the description of fund recruitment prospectus.And in the drift direction,bull market to growth,bear market to value.Then,with Sharp ratio as dependent variable,drift behavior and drift direction of style drift as independent variable in Chapter 3,a panel data regression model is constructed to explore the impact of style drift on fund performance.After stationarity test,covariance test and Hausman test,a fixedeffect variable intercept model is established to regression panel data.Through explaining the regression coefficient,we can judge the impact of style drift on fund performance.The results show that,on the whole,style drift has a positive impact on fund performance,that is,style drift behavior can significantly improve fund performance.In the drift direction,the drift towards growth will improve fund performance,while the drift towards value will significantly reduce fund performance.At the same time,the stronger the style consistency of sample funds,the better the fund performance.After the conclusion is drawn,in view of the thinking in the whole research process,this paper puts forward reasonable suggestions for fund style drift behavior and its impact on performance.