Fullgoal poised to launch first pension fund

18 March 2014   Category: News, Asia, China, Global   By Hui Ching-hoo

Shanghai-based Fullgoal Fund Management is set to launch its first pension fund following the Ministry of Human Resources and Social Security (MHRSS) accepting the application for its stable value hybrid pension product.

Local media reported that the benchmark for Fullgoal’s pension product is equivalent to the one-year fixed deposit rate plus 200 basis points. The fund is permitted to allocate up to 30% of its assets to equities; however, it cannot invest in fixed income with credit ratings of less than AA.   

The move comes after the Chinese government launched a 401K-style tax-deferred pension investment scheme in January 2014, which enables employees to earmark a tax-deferred portion of their wages for investment in order to allow Chinese savers the chance to improve returns on their investments.

Given that tax concessionary measure are expected to significantly boost the capacity of the Mainland pension market, a number of banks and asset managers, such as Everbright Bank and HFT, entered into the niche market by rolling out their first pension fund products last year.