中国新基金过度发行之谜和投资者保护

Abstract

This paper explores the institutional causes of the phenomenon of 'emphasizing new fund issuance while neglecting existing fund management' in China's public mutual fund industry and its impact on investor protection. Fundraising in China's public mutual fund industry mainly relies on issuing new funds, with an average of 2.7 funds managed by each manager. The study finds that the reason for massive new fund issuance is that funds rely on bank channels for fundraising and must pay high custodian fees to banks. The way fund companies compete for bank channel resources is by issuing a new fund custodied at the bank, exchanging custodian fees for fundraising support. Comparing new and old funds managed by the same fund manager, new funds outperform old funds by an average annualized return of 1.5% to 2%; when a fund manager issues a new fund, the performance of their old funds declines. Since the capital inflow of new funds is more dependent on their recent performance, fund managers have stronger incentives to improve new fund performance. Excessive issuance of new funds harms the interests of old fund investors. Meanwhile, repeated redemptions and subscriptions are not conducive to fund manager management, exacerbating the retailization tendency of fund investment, ultimately affecting the investment returns of the entire fund industry and capital market stability.