Abstract
Is risk-taking behavior of Fund managers to consider for their own benefit maximization? Based the unbalanced panel data of 2004-2012 in China fund market, we empirically examine the relation between fund risk and fund managers reward. The results show that the fund choosing higher risk will not bring decreasing investment cash flow, and the investors generally show a “reward” attitude to high-risk funds. Furthermore, we find fund managers reward is a result of taking greater systemic risk.
Highlights
Fund managers, in their investment decision, often choose different risk portfolio to change the risk level of mutual fund [1]
Some research have found that the fund manager does not lead to better performance for fund investors returns [4], we mainly, from the perspective of fund managers self-interest, examine whether fund risk-taking behavior can bring greater compensation for fund managers
The fund performance performance coefficient Performance is positive, suggests that investors prefer to good fund performance; Fund size TNA and fund age Age coefficients is negative and highly significant, showed that fund investors prefer to choose the smaller and younger fund
Summary
In their investment decision, often choose different risk portfolio to change the risk level of mutual fund [1]. By choosing fund risk, whether can bring their greater rewards?. Fund managers rewards are positively related to the fund’s net asset value they managed, and the scale of fund net value mainly depends on fund investors’ cash flow [2]. For its own or fund investors interests consideration, fund managers often , by choosing a higher beta stock portfolio, improving the industry concentration degree of securities and reducing the number of stocks , raise mutual funds risk level [3]. Some research have found that the fund manager does not lead to better performance for fund investors returns [4], we mainly, from the perspective of fund managers self-interest, examine whether fund risk-taking behavior can bring greater compensation for fund managers
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