China’s pension investment is becoming more sophisticated, say analysts, as managers pivot to long-term investments such as biotech and new energy.
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The country's pension funds are lagging behind their Asian peers for sustainable returns, leading to calls for Beijing to let them invest in more alternative assets.
As Beijing seeks to expand its pension system it will need to find ways to simplify how the system is managed, instead of maintaining the set of watchdogs that currently have a say.
China’s former central bank governor Zhou Xiaochuan has spoken in favour of letting pension funds invest overseas, a sign senior officials are considering such a move.
If the state pension fund is empowered to push for better ESG standards by local companies, it could help turbo-fuel China's apparent ambitions as an environmentally conscious nation.
After a two-year trial run, the ambitious scheme is being extended nationwide. Investment restrictions and built-in home bias, though, could undermine its effectiveness.
China’s national pension fund will play a greater role in helping local governments grow their pension assets. This should also benefit external asset managers.
Industry experts say a proposal by a member of China’s top advisory body to allow the state retirement fund to invest more in equities should be extended to overseas stock purchases as well.
China's state retirement fund manager is to receive more assets from Shanghai and Sichuan province. Detailed rules about a new central adjustment fund will also be released soon.
The Chinese authorities are making efforts to reform corporate governance standards but the state pension fund could help by setting an example, argues one industry advocacy group.
Japan's huge state pension fund is expected to issue new smart-beta mandates later this year, as part of its evolving global asset allocation.
The country's flagship state retirement fund saw its assets swell 6.7% to $300 billion despite posting a return of just 1.73% in 2016. Chairman Lou Jiwei set out its investment plans.