China’s NCSSF sees return of 7.01% in 2012
02 July 2013
By Hui Ching-hoo
The National Council for Social Security Fund (NCSSF) announced on June 27 that China’s supplementary pension fund, the Social Security Fund (SSF), realised an investment return of 7.01% last year, taking its total AUM to 1.1 trillion RMB (US$175.5 billion) as of the end of 2012.
The fund has booked accumulated revenue of 349.2 billion RMB since its inception in October 2000, translating into an annualised return of 8.29%. As such, the fund outperformed the country’s inflation rate during the period.
The fund’s performance has been highly volatile throughout its time, tracking the ups and downs of the domestic markets. Returns peaked at 43.19% in 2007 before sliding into the red the following year. The SSF recorded a return of just 0.84% in 2011.
The NCSSF manages 58.83% of its assets in house and outsources the remaining 41.17% to external managers.
In early 2012, the NCSSF took over the 100 billion RMB social security fund from Guangdong provincial government. The fund had grown to 103.4 billion RMB as of December 31, 2012.
The fund’s portfolio encompasses a wide array of asset classes such as long-term equity investments, bank deposits, and tradable financial assets.
Up to the end of 2012, a total of 106.5 billion RMB of state-owned equities had been transferred into the SSF’s account, in accordance with the ‘Implementing Measures for the Transfer of Some State-owned Shares from the Domestic Securities Market to the National Social Security Fund’ passed in June 2009. The measure was implemented to ensure the raising of social security funds via multiple channels.
Dai Xianglong, party chief of the NCSSF, previously urged the government to push ahead with the transfer of state-owned assets to the NCSSF in an effort to boost the size of the pension fund to 3 trillion RMB by 2020.
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