Abstract
Earlier investment practices show that there lies a discrepancy between the actual fund strategy and stated fund strategy. Using a minimum spanning tree (MST) and planar maximally-filtered graph (PMFG), we build a network of open-ended funds in China’s market and investigate the evolution characteristics of the networks over multiple time periods and timescales. The evolution characteristics, especially the locations of clustering central nodes, show that the actual strategy of the open-ended funds in China’s market significantly differs from the original stated strategy. When the investment horizon and timescale extend, the funds approach an identical actual strategy. This work introduces a novel network-based quantitative method to help investors identify the actual strategy of open-ended funds.
Highlights
Investment funds provide investors many advantages, such as professional wealth management and more diversified portfolios
By studying the network evolution as time period lengthens and as the timescale expands, we provide a quantitative identification for the dynamic fund’s actual strategy
Identifying the dynamic evolution of an open-ended fund network helps investors learn the actual change of fund investment strategy
Summary
Investment funds provide investors many advantages, such as professional wealth management and more diversified portfolios. They are growing as a preferable option in today’s investment practices. Many fund companies spend tremendous efforts introducing their investment strategies to investors. These strategies, commonly called the stated strategy, are publicly available to investors. Many fund managers and companies, often change their stated strategies, aiming to earn higher profits. The actual strategies are not known by investors. How to get efficient and reliable information about funds’ actual strategies has become a big challenge for researchers and practitioners
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
