Redemption puzzle of open-end fund market in China

Rong Lu (), Longbing Xu (), Xinhou Xie () and Baizhu Chen
Additional contact information
Rong Lu: School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China
Longbing Xu: School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China
Xinhou Xie: School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China
Baizhu Chen: Department of Finance, Marshall School of Business, University of Southern California, Los Angeles, CA 90089, USA

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2008, vol. 3, issue 3, 430-450

Abstract: We examine the performance-flow relationship(PFR) in Chinese open-end fund market and find that PFR is negative and concave. The shape of PFR indicates that investors¡¯ choice does not pose an incentive mechanism on fund managers: The better an open-end fund performs, the higher the net redemption rate is. We argue that return volatility, dividend and fund size are also important factors on investors¡¯ choice making. Such results are valuable for fund management to reduce this redemption puzzle.

Keywords: open-end fund; fund performance; cash flow; redemption puzzle (search for similar items in EconPapers)
JEL-codes: D81 G11 G14 G23 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.1007/s11459-008-0020-x (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:3:y:2008:i:3:p:430-450

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().