Our study is among the first to examine the net asset value (NAV) inflation practices of fund managers in China, finding that equity funds bolster their portfolios at quarter-end and especially year-end. In support of the NAV inflation hypothesis in China, we further document the following: (1) NAV inflation is more profound for the worst-performing fund managers and (2) the stocks in which fund managers hold larger stakes exhibit a more marked pattern of price inflation around quarter- and year-ends than do other stocks. We also find that closed-end funds in China engage in NAV inflation at quarter- and year-ends.
This is the peer reviewed version of the following article: Shackleton, M, Yan, J, Yao, Y. NAV inflation and impact on performance in China. Eur Financ Manag. 2019; 1– 25. https://doi.org/10.1111/eufm.12207 which has been published in final form at https://onlinelibrary.wiley.com/doi/full/10.1111/eufm.12207 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
