Is The Operation Of Public Funds Effective?

The outline of the 14 th five year plan and the long-term plan for 2035 proposed to deepen the reform of the fiscal,taxation,financial investment and financing system and strengthen the construction of a multi-level capital market system.Up to now,institutional investors have more and more influence in the capital market.As the most active institutional investors and the most closely connected public fund with ordinary investors,it is an important part of the investment and financing system in the construction of the capital market.Its development degree,management level and operation performance directly affect the effectiveness of the construction of the capital market system,It is very necessary to study the operation and management of public funds.The most important practical significance of China’s vigorous development of public funds lies in: first,providing investors with a channel to maintain and increase their wealth,so that they can obtain the return of corresponding elements when participating in the capital market;Second,it can optimize the structure of investors,reduce stock price errors,curb irrational market speculation,improve the quality of market prices,and promote the development of the capital market in a more healthy direction.Based on these two perspectives,this paper makes an empirical analysis.Is the operation of actively managed public funds effective in China? This paper studies the effectiveness of the operation of public funds from the above two dimensions.The first is effective for investors,that is,in the long run,will actively managed public funds bring sustained excess returns to investors? On this basis,we select a series of indicators that can measure the fund management ability,and use CAPM model and CH-3model for empirical analysis.The selected targets of these indicators can provide investors with excess returns based on the fund’s unique information mining ability that aren’t explained by market factors,scale factors and value factors.The results show that not all public funds are effective for investors,and there are significant differences in fund management ability.We can use a series of indicators to identify the differences in fund management ability.The second is that it is effective to correct the price deviation.In the long run,can actively managed public funds improve the stock price deviation—— Analyze the impact of actively managed public funds on asset mispricing.We use the fund holding proportion and the number of funds held to express the position behavior of public funds.The empirical results show that the impact of public fund positions on asset mispricing presents a positive "U" shape.Initially,the increase of fund positions will improve asset mispricing.When reaching a critical point,the continued increase of fund positions will exacerbate asset price bias;Panel regression results show that there is a positive correlation between the change of fund position and the degree of asset mispricing,which shows that the increase of stock position of public funds will lead to the upward deviation of asset price from its intrinsic value;At the same time,we found that when facing the existing asset mispricing,public funds will choose to carry out negative feedback operation to gradually eliminate the asset price bias.The empirical results show that public funds are effective in correcting price errors to some extent,but there is still a phenomenon that public funds use foam to exacerbate asset price errors.In view of this result and combined with the actual situation of the public fund market,this paper puts forward a series of policy suggestions to promote the healthy development of the fund market.