China pension fund returns tumble in 2011 on sluggish markets
SHANGHAI, June 15 |
SHANGHAI, June 15 (Reuters) - China's National Social Security Fund (NSSF) saw its annual investment return tumble to 0.8 percent last year, from 4.2 percent in 2010, hit by sluggish domestic markets, the official China Securities Journal reported on Friday.
It was the fund's worst performance in three years and highlights the urgency to improve its investment portfolio and increase its returns against the backdrop of a rapidly aging population and a slowing economy.
Two prominent economists said in a report earlier this week the gap between future liabilities and assets of China's pension fund now stands at 18.3 trillion yuan ($2.87 trillion), advocating selling off state assets including land to cover a shortfall that in 38 years will equal 75 percent of current GDP.
The NSSF, which manages the country's biggest pension fund worth 869 billion yuan ($136.4 billion), saw nearly 70 percent of its 2011 returns come from private equity investments, including investments in state-run companies owned by the central government, the report said.
NSSF chairman Dai Xianglong was quoted as saying the fund would increase investment in private equity by more than 50 percent this year to 30 billion yuan to cushion against the volatility in China's stock and bond markets.
By the end of 2011, 50.7 percent of the fund's assets were invested in fixed income markets, 32.4 percent in stocks, and 16.3 percent in state-owned companies in the form of private equity investments. $1 = 6.3703 Chinese yuan) (Reporting By Shanghai newsroom; Editing by Kazunori Takada and Eric Meijer)
- Tweet this
- Share this
- Digg this