IDEAS home Printed from https://ideas.repec.org/a/fec/journl/v3y2008i3p430-450.html
   My bibliography  Save this article

Redemption puzzle of open-end fund market in China

Author

Listed:
  • LU Rong

    (School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China)

  • XU Longbing

    (School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China)

  • XIE Xinhou

    (School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China)

  • CHEN Baizhu

    (Department of Finance, Marshall School of Business, University of Southern California, Los Angeles, CA 90089, USA)

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.

Suggested Citation

  • LU Rong & XU Longbing & XIE Xinhou & CHEN Baizhu, 2008. "Redemption puzzle of open-end fund market in China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 3(3), pages 430-450, September.
    • Handle: RePEc:fec:journl:v:3:y:2008:i:3:p:430-450
    as

    Download full text from publisher

    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-008-0020-x
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    open-end fund; fund performance; cash flow; redemption puzzle;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fec:journl:v:3:y:2008:i:3:p:430-450. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Frank H. Liu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.