Investment funds can be divided into open-end funds and closed-end funds inaccordance with the mode of operation. Open-end funds, contrasting to closed-endfunds, are those which can meet the needs of investors to buy or redeem according tothe needs of market and investors. Currently, open-end funds have become the mainstream of funds all over the world and will be the goal of funds development in ourcountry.From the world perspective, the investment funds have developed no more than 100years. Open-end funds have a history of only 70 or 80 years and they have effects onglobal economy only when the wave of financial fleedom in the western society began1970S’. But the western economic circle has done a comparatively deep research.Investment funds are only at their initial stage in our country, in particular the open-endfunds, and the theoretical field inure laundry has study them only on their initial andexploring stage. This paper has its practical sense and is a try and exploration to studyon front problems in china’s financial field.Based on the combination of institutional and analytical approach, historicalanalytical approach and comparative approach, has began her exploration in open-endfunds as follows:Chapter 1, the author paraphrases a few basic concepts and compares closed-endfunds with open-end funds. The funds established in our country are all belong toclosed-end ones adapted in the market which is in the bad. Whether old or now thereexists some kinds of problems in the operation. The open-end funds have moreincomparably institutional advantages and are able to overcome the institutional defectsin the closed-end funds of our country Chapter2, the problems existing in the operation of closed-end funds in aur countryare due to not only the defects in institutional arrangement, but also the imperfectinstitutional environment. Likewise, it is not enough to have only its institutionaladvantages in open-end funds. As creation of finical institution, Open-end funds musthave their matching institutional environment to make them stable. The author Come tothe conclusion that the current institutional environment in comparison with the closed-end funds operated meet the needs of open-end funds in our country.Chapter3, As creation financial institution, open-end funds will surely have animportant effect on the current structures of market and system in our country Itssignificance lies in the fact that it can not only add a new investment tool, but also betterthe capital market system in ot1r country, set up a new incremental f1lnd to enter themarket, promote the competition of f1nds, and strengthen the quality of listed. ~companies.Chapter4, As institutionaI creation. Open-end funds have their special risks:circulating risks, risks of purchasing-redeeming price expenditure, investment risks(systematic and unsystematic risks). Risks can be controlled to a certain degree. Andthey can’t be diminished. Therefore, it is essential to keep the risks under control bothintemally and externally.ln a word, open-end f11nds are not only a creation in fund institution, but also haverevolutionary influence on the capital market in our country while applying this finacialinstitution, we sl1ould stipulate the institutional arrange111ent and strengthen theconstruction of institutional environment. We should see clearly the benefits thisinstitution produces, and the risks wI1ich can’t be l1eglected. We shall lay emphasis onthe control over it. only by doing so, can open-end ftnds grow uP nourish in the capitalmarket in our country.