The Search of Structural Changes in Mutual Fund Industry-Based On the ARMAX-GJR-GARCH Model

This study aims to examine the impacts of a bond fund segregation policy event on Taiwan mutual fund industry. In principle, mutual fund industry is a highly regulated industry. However, bond funds focus on pursuing short-term high returns and increasing their scale by investing in structured products with poor liquidity and those offered to clients and increasing the funds’ liquidity risks; this event would significantly affect the development of mutual fund industry. Accordingly, this study examines pre- and post- a bond fund segregation policy, event for verifying the impacts of this event on mutual fund industry changes. The empirical findings of mutual fund industry have significantly changed because of new regulations causing from the event. In particularly, the Bond funds and management fees from the significant relationship into does not have a significant relationship. The mutual fund industry needs to cultivate more professional managers, as well as create more types of mutual funds, and offers a wide range of financial products to meet the needs of different investors, and to strengthen the development of the mutual fund industry.