The Research of Fund Spillover Effect and Crowding-out Effect in China

Abstract: Although the fast development of funds in china, it is few notices what roles fund companies play in the whole industry and what strategy fund companies take in competitive environment. Although fund performance is always regard as close-related with the manager’s ability ,it is very important to comprehend and evaluate the influence of operation environment and the mental state of the investor. In this paper, by analyzing causes of both spillover and crowding-out effects, the fund company can find out the relationship between performance and flows of different funds, as well as the factor which concerned. As a result, the fund company may find convincing reference background to the product strategy or marketing policy. It can also provide a more rational invest analysis for investors. This paper summarizes important structures of standard finance theory, then looks back the applications of behavioral finance theory in security market, especially makes a brief describe psychology and behavior of investor. And then introduces the relative study development domestically and abroad. In the Chapter Three, which is about study design, this paper makes out a detailed explanation of Panel Data model, which will be used in latter demonstration; in chapter Four, in brief, this paper analyses open-end funds performance-flow correlation; in chapter five and six, this paper does test to check whether open-end funds of one company have the effects it has talked above, even the persistence or postponement, from both closed-end fund and open-end fund. From our demonstration results, when pick up funds, investor will be affected by performance of other funds of the same company as well as factors such as qualifications of the fund he buys. So the company should think much of the whole performance, pay attention to performance of every single fund, along with setup whole brand image…
Key words: flow; performance; spillover effect; crowding-out effect

This entry was posted in Master Thesis. Bookmark the permalink.