Systemic Risk, Idiosyncratic Risk and Mutual Fund Flows

Zhiping Jiang^1,2, Yixiang Tian¹, Huangang Zheng²

¹School of Economics and Management, University of Electronic Science and Technology of China, Chengdu, China.
²Jincheng College of Sichuan University, Chengdu, China.

DOI: 10.4236/jss.2015.33003                

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.

Keywords

Systemic Risk, Idiosyncratic Risk, Risk-Taking, Fund Managers Reward

Conflicts of Interest

The authors declare no conflicts of interest.

References

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