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An Empirical Research on Influence of Fund Manager Turnover on Fund Performance

Author ZhengJie
Tutor HuXin
School Xi'an University of Electronic Science and Technology
Course Finance
Keywords Open-end fund Fund manager Turnover Fund performance
CLC
Type Master's thesis
Year 2012
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With the rapid development of the fund, the frequent change of fund managers which may affect its performance and damage the profit of the investors is becoming a prominent feature in China. Therefore, the research in the change of fund managers has an important theoretical significance. And it has an important role in both investors to save the cost and fund management companies to choose talent fund managers.In this paper, open-ended equity funds and hybrid funds for the study. Firstly, the assumptions are proposed in the article according to the related literature both in home and abroad, combined with the situation of China fund and fund manager turnover. Secondly, collecting appropriate sample data, and using paired T test to study the impact of fund manager turnover on fund performance. Finally, use SPSS17.0to make the empirical analysis. The results of the study show that:first, there is a negative effect on the fund performance when changing the fund manager of positive samples. For negative samples, fund performance is significantly better than the before, fund manager replacement has positive influence on it. Second, the former fund manager’s portfolio risk is greater than the latter to the positive samples and no significant change in the portfolio risk of the negative samples. Third, fund managers have stock picking ability, but they have no timing ability to the positive samples. For the negative fund, two kinds of ability have been greatly improved. In general, the fund managers have stock picking ability and timing ability. Fund managers origin from fund managers and certifications of CFA\FRM\CPA, significantly positively related to the fund performance of profitability.In general, the replacement of fund managers is good to improve the performance of negative samples. Otherwise, it makes the performance worse. The result shows that fund managers adjusting mechanism of fund management companies has a certain effect when fund performance is poor. However, there is still a certain lack of it. Fund investors should change their views of fund manager turnover. Fund management companies need a more robust system of fund managers adjusting mechanism and performance appraisal. China Security Regulatory Commission needs to impose new regulations on fund manager talent market to establish cultivation mechanism and reduce rates of manager turnover.

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