In view of the strange phenomenon that new funds are issued constantly while the asset scale of fund companies and the fund industry is at a standstill, this paper makes an empirical analysis on the such problems as the relationship between capital flow and new fund issuance, factors and impacts influencing the issuance of new fund. The study finds that although the new funds can absorb more capital flow than the old ones, issuing new funds may lead capital flow out of the similar old funds. Thus, it is just like a “rob-Peter-to-pay-Paul” game which does no good in expanding the asset scale of fund companies and fund industry. If the fund companies cannot issue new fund, their market share will be occupied by the new funds issued by others. So the fund companies are forced to issue new funds with the aim to seize the market and get out of the weak position in the market. Issuing new funds may increase their market share and performance in the short term, but it is not so effective in the long term. It may even damage the companies performance. The sustainable development of the fund companies and the fund industry depends on improving fund performance other than issuing new funds.