China’s EAs deliver below par results in first half
31 October 2013
By Asia Asset Management
China’s enterprise annuities (EAs), the second pillar of the country’s retirement system, recorded a below par return of 2.31% for the first half this year as a result of the downside of the Mainland stock market.
According to Ministry of Human Resources and Social Security (MHRSS), the 2,523 accounts managed by 21 EA fund managers realised total revenues of 10.64 billion RMB (US$1.63 billion) between January and June translating into annualised returns of 2.63%, against the level of 5.86% in the same period a year earlier. The result fell short of market standards given the Chinese government had targeted its consumer price growth at around 3.5% for 2013.
Sun Hao, managing director and institutional sales head, Greater China, at AllianceBerstein, told local media that the market environment for China’s pension industry is very tough and that fund managers have been finding it difficult to beat the market and deliver stable returns. He says they need to take various elements such as inflation, contributions, market conditions, and longevity into account when mapping out their investment strategies.
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