Research On The Influence Of Public Offering Of Fund’s Investment Behavior On The Volatility Of Stock Market In China

China’s stock market,in the process of rapid development,has shown characteristics of high volatility,and the large proportion of retail investors is considered to be an important reason.For this reason,the regulator began to develop institutional investors represented by public funds in an extraordinary manner,expecting that public funds could give full play to their innate advantages in various aspects such as professionalism,information and capital to lead rational investment and promote the return of value,thus calming the volatility of the stock market.With the dual role of external policies and internal money-making effects,public funds have now successfully taken the center stage of China’s investment market.However,the reality shows that,with the continuous growth of public fund assets,the influence of public funds on the stock market is increasing,but the phenomenon of frequent noise trading and high volatility in China’s stock market has not fundamentally improved,and the policy intention of the regulator to vigorously develop public funds to stabilize the stock market has not really been realized.Therefore,it is necessary to re-examine the impact of China’s public equity fund investment behavior on stock market volatility.Based on behavioral finance,this paper takes two types of public fund investment behavior,herding effect and positive feedback trading strategy,as the pulse.While conducting a theoretical analysis on the impact of public fund investment behavior on stock market volatility,the current situation of public fund investment and the current situation of stock market volatility in China are elaborated.Using the GARCH family model,monthly data for 216 months from January 2005 to December 2022 are selected to portray the volatility of China’s stock market with the fitted conditional variance of SSE index and SZSI index,and the investment behavior of public funds is described by fund turnover and fund turnover rate to empirically analyze the impact of China’s public fund investment behavior on the volatility of the stock market.Subsequently,the case of public fund manager Zhang Kun’s dramatic change in performance around the Spring Festival in 2021 is introduced to analyze the reasons behind it in relation to the relationship between public fund investment behavior and stock market volatility.The findings show that public funds failed to perform the theoretical function of stabilizing the market and smoothing stock market volatility,but instead,they also exacerbated stock market volatility to a certain extent.Combining various analyses such as the current situation,empirical evidence and cases,and based on the actual situation in China,this paper puts forward policy recommendations in five aspects,including improving the securities investment market environment,enhancing the quality of listed companies,establishing a scientific fund evaluation system,innovating high-quality financial products,and strengthening investor education.