Decrypt Social Security Fund For The Three Time To Select Overseas Investment "Housekeeper"

The social security foundation has selected overseas candidates globally.

Three selection of the global elite

A few days ago, the National Social Security Fund Board issued a bulletin on the selection of overseas investment managers, which is to be selected for the selection of related products.

According to the announcement, applicants should have 7 conditions: as of May 31st, the applicant institutions should manage assets management for more than 6 years, with assets of not less than 5 billion US dollars (or equivalent currencies). The past three years have not been severely punished by the regulatory authorities of the countries or regions where they are located. The applicant must be established and registered outside China, and the legal and financial regulatory system of the country or region is perfect. The regulatory body and the CSRC shall sign a memorandum of understanding on regulatory cooperation and maintain effective regulatory cooperation.

The major products of the social security fund to be entrusted to overseas investment managers include multi asset class allocation products, emerging markets (except China), local currency bonds active products, global resource stocks active products, and global real estate stock active products, and so on four kinds.

Compared with the previous two selection, the recruitment of social security fund has more than 3 years of similar products.

In addition, the products are new market (except China) local currency bonds active products and multi asset allocation products.

Among them, the investment target of multi asset allocation products is to maximize the investment income under a given risk target, and the investment scope includes swap and so on, which are all investment varieties permitted by the Interim Provisions on the management of overseas investment of the national social security fund.

The overseas draft of social security fund is actually the third time.

Statistics show that in March 2006, with the approval of the State Council, the Ministry of finance, the Ministry of labor and Social Security jointly issued the Interim Provisions on the management of overseas investment of the national social security fund, which opened the prelude to the overseas investment strategy of the national social security fund.

In May of the same year, according to the latest announcement of the National Council for social security fund on the selection of overseas investment managers, the selection of the first batch of overseas investment managers of the national social security fund was officially launched.

At that time, a total of 84 internationally renowned institutions submitted applications, and finally 10 overseas investment managers were selected. They were INVESCO investments, joint venture company, Desheng Allianz, Anson Rosenberg Investment, Bedle, Chun Li Ying Da, Dao Fu global investment, PIMCO, Pu Xin asset management, Rui Yin universal / China International Finance Corporation.

The first batch of overseas managers selected are 5 kinds of investment portfolios of global stock, bond and foreign exchange.

At the end of May 2008, the social security fund conducted two overseas draft shows, including 12 overseas investment managers, including France, AXA, Martin Martin, fidelity, Fidelity Investment, German Schroder investment, American investment, Pacific Investment and New York Mellon bank.

The entrusted products are 5 categories: China's overseas stock, Asia Pacific (excluding Japan) stock, emerging market stock, European stock and global stock active type.

Up to now, the total number of overseas investment managers has reached 22.

Speeding up the "sea going"

In fact, when the social security fund was established, the main investment was fixed income products.

Since June 2003, it began to invest in equities, and began direct investment in equity in June 2004. It began investing in overseas stocks and bonds at the end of 2006, and began investing in equity investment funds in 2008.

Since the financial crisis, the pace of social security fund's "going to sea" has been accelerating.

On November 2009, Dai Xianglong, chairman of the Council of social security fund, attended the Asian round table conference held in Bangkok. He said that since the fund did not have significant expenditure arrangements in the past 10 years, it was proposed to appropriately reduce investment in fixed income products, maintain the proportion of stock investment, and appropriately increase investment in industry.

The proportion of overseas investment increased from 7% now to 20%, opening up investment in overseas unlisted companies and equity investment funds.

On March 2010, Dai Xianglong said at the news media symposium organized by the social security fund that the national social security fund will expand and accelerate the pace of overseas investment and consider investing in non-listed company and overseas private equity funds.

He also said that by 2015, the scale of the national social security fund will reach 2 trillion. In order to meet the needs of fund returns, the national social security fund will continue to expand overseas investment on the basis of summing up past experience and raise the proportion of overseas investment to total assets from the current 6.7% to 20%.

On July 2010, at the Hongkong Summit Forum held by the Chinese General Chamber of Commerce in Hongkong, Dai Xianglong said that the overseas assets such as overseas stocks, bonds and pfer of overseas state-owned shares held by the social security fund account for less than 7% of the total fund size, while the proportion of overseas investment permitted is 20%, which means that the social security fund still has 13% space to invest overseas.

But this process is not one step in place, but will gradually expand.

At the Boao conference in April this year, Dai Xianglong said that he had submitted an application for investing in overseas FOF to the Ministry of finance. At present, 3 overseas FOF agencies are communicating with the national social security fund on related investment matters, and the total amount of social security funds to invest in these 3 households will reach 1 billion dollars.

In the field of overseas direct investment, the national social security fund's trial tour opened last year to invest in Singapore logistics giant.

Statistics show that he was listed on the Singapore Stock Exchange in October 18, 2010, the largest IPO project in Singapore in 17 years.

Pls prospectus shows that China's national social security fund has invested 1 billion yuan to subscribe to 100 million shares of IPO, accounting for 2.2% of its total capital stock.

According to the calculation of 1.96 Singapore dollars per share, the investment involved about 196 million Singapore dollars, or about 1 billion yuan.

This shot also reflects the soundness of the social security fund. Its chosen share price is relatively high in terms of its stability and insurance coefficient for the assets sold by the government of Singapore.

With the constant changes of policies, the investment allocation of social security funds is also quietly changing.

Data show that by the end of 2009, investment in fixed income products accounted for the proportion of all funds, from 56.28% at the beginning of the year to 40.67%, and the share of domestic and foreign stock investment increased from 21.98% at the beginning of the year to 32.45%; the proportion of industrial investment increased from 14.57% at the beginning of the year to 20.54%; the proportion of investment in cash and other industries decreased from 6.34% at the beginning of the year to 6.34%.

By the end of 2010, the total assets of the fund managed by the national social security fund amounted to 856 billion 690 million yuan.

Among them, the direct investment assets of the social security fund were 497 billion 756 million yuan, accounting for 58.10%; the entrusted investment assets were 358 billion 934 million yuan, accounting for 41.90%, and the investment return rate was 4.23% last year.

According to the relevant policies, the proportion of overseas investment of social security funds can be controlled within 20% of total assets. Therefore, overseas investment funds can reach up to 170 billion yuan.

Overseas gold harvest is quite fruitful.

Thanks to the management of the top global capital operation and operation selected by the social security fund, the social security fund has achieved considerable success in overseas markets in recent years.

Data show that in 2009, the investment income of the national social security fund was 84 billion 900 million yuan, with an investment return rate of 16.1%, of which the yield of newly added offshore stocks reached 53.26%.

Behind the surge of social security fund income is closely related to the increase of domestic and foreign direct investment.

The first quarter of 2009 coincided with the recovery of the European and emerging market equities from the global credit crunch triggered by the subprime mortgage crisis. The global economic stabilization has also created a stable recovery for the most growing Asian economies.

From the market point of view, A shares first rebounded in 2009, followed by a major recovery in the world's major markets.

In the main index, the US rose 17% and the Shanghai Composite rose 53%.

Over the same period, Indonesia rose 106%, India rose 80%, Korea rose 64%, Asian index rose 58%, and H-share rose 50%.

When the vast majority of international investment institutions are still on the sidelines, the social security fund has taken the lead in making the decision to increase positions, thus making its newly added overseas stock investment achieve a high investment income of 53.26%.

At a news conference held in March this year, Dai Xianglong said that the fund's investment income in 2010 was 32 billion 100 million yuan, and the return on investment was 4.22%.

Among them, the realized income was 42 billion 500 million yuan, and the floating assets of trading assets decreased by 10 billion 400 million yuan.

As of December 31, 2010, the total size of the fund managed by the social security fund was 856 billion 800 million yuan, an increase of 80 billion 200 million yuan over the previous year, an increase of 10.32%.

It is predicted that the scale of the fund managed by the social security fund will reach 1 trillion and 500 billion yuan by 2015.

He pointed out that the social security fund will expand and accelerate the pace of overseas investment. As part of the international expansion plan, the national social security fund will also expand investment in the US and European stock markets and bond markets.

"The social security fund has achieved good results, thanks to timely grasp of the macroeconomic situation and changes in the financial market, and timely optimization of asset allocation structure."

According to the insiders, the expansion of overseas investment by social security funds can not only expand the investment scope of pension funds, diversify their asset structure, effectively reduce investment risks, but also promote the opening of domestic capital account and raise the level of opening up to better adapt to the development needs of international capital market integration.

Need to expand overseas investment

"Three barriers"

Despite its establishment in the past ten years, the social security fund has achieved remarkable results.

Data show that over the past ten years, the social security fund 60% profit from stock investment, stock investment average annual return rate of about 10%.

However, the road to China's capital investment was not smooth sailing. Dai Xianglong said during the summer Davos forum in Tianjin last September that China wants to expand its foreign investment facing three major challenges.

First of all, China's investment funds are generally inexperienced.

Most of China's investment funds are only 3-5 years old, and the fund that has been established for 8 years has been relatively long.

Moreover, there are many problems in the governance structure of China's fund management companies, and many of them belong to the management mode of the administrative organs.

"For example, I manage the social security fund of 1 trillion and 120 billion yuan, which is directly under the State Council.

The system also needs to be improved. We already have a decision-making level, but this decision level should be more market-oriented.

Dai Xianglong said.

Secondly, institutional restriction is the second obstacle to China's capital going to sea.

Dai Xianglong believes that the government needs to relax some institutional restrictions, for example, China's local government currently manages a total of more than 2 trillion yuan of social insurance funds, but these funds can only be deposited in the bank to buy treasury bonds, with a return rate of only about 2%.

Dai Xianglong believes that in order to expand foreign investment, China should expand the scale of QDII and gradually release the restrictions on the purchase of foreign exchange by urban and rural residents.

Third, investment protectionism.

Dai Xianglong believes that CNOOC, Anshan Iron and HUAWEI have experienced investment failure in the United States.

In this regard, China also needs to change the way of foreign investment, instead of limiting foreign investment to the purchase of overseas resources. It can cooperate with investment destination countries to exploit, process and sell resources, leaving some profits to the country of investment.

Therefore, the ways and means of foreign investment should be relaxed.