An Empirical Study On The Relationship Between FOF Fund Expense Ratio And Performance

In recent years,the development of FOF funds has been accelerating,and the topic of FOF funds has become increasingly hot.The fund of funds scale with its unique advantages in the fund market to continue to expand.In particular,the issuance of the first public FOF funds in China in 2017 has attracted the attention and favor of investors for robust FOF products.Compared with the mature FOF fund market in the United States,domestic FOF fund is in the initial stage of development.Widely ’funds of double charge problem remains to be further explored,and the current domestic research associated with’ fund fee structure is less,so in this paper,after screening the whole market ’funds rate with empirical research,the correlation of fund performance and the rate fixed and floating rate’ fund classification analysis,It has important theoretical and practical significance to guide the investment of FOF fund.Based on principal-agent theory and incentive theory,this paper conducts theoretical analysis on the relationship between expense ratio and performance of FOF funds in the whole market,covering FOF funds of securities firms,FOF funds of public offering and other types of FOF,and studies the performance of public OFFERING FOF after its launch.In this paper,a total of 1376 hybrid FOF funds with open data are selected from the domestic fund market.Through the review and collation of relevant literature review at home and abroad,make relevant assumptions.Firstly,the influence of FOF fee ratio on fund performance is explored,and then the influence of two fee modes,namely fixed management fee mode and floating management fee mode,is explored.This paper concludes that the expense ratio of FOF funds is negatively correlated with performance.That is,the higher the fee charged by FOF fund,the worse the fund performance;When FOF funds charge lower fees,the fund performs better.Secondly,under different management fee modes,the impact of expense ratio on fund performance still exists;For FOF funds that extract floating management fees,it still holds that the expense ratio of FOF funds is negatively correlated with performance.