We use open-end securities investment fund statistics listed before 2004 to simulate the performance of university educational funds to find out the solution to the problem of China’s university educational funds’ investment. The study finds that even though financial crisis exists within the sample

guaranteed funds and monetary funds have high profit

bond funds

guaranteed funds

index funds and mixed funds have the ability to offset the systematic risks and most of the funds indexes can be against the expected inflation. The study also highlights that in order to offer good investment platform for university educational funds

institutions and governing rules must be fulfilled and university should strengthen the supervision on investment and management of university educational funds to increase the value of the funds.