China’s NSSF sees returns plunge in 2016
China’s National Council for Social Security Fund (NSSF), the largest pension fund in the country, saw its investment return decline to 1.73% in 2016 from 15.19% the previous year, largely due to losses on fixed income products.
Over the course of the year, NSSF's long-term equity investments, which include private equity fund and direct commitments, increased to RMB162 billion ($23.7 billion) from RMB141 billion in 2015. Total assets under management came to RMB2.04 trillion, of which domestic investment assets accounted for 93.3%.
Investment income reached RMB31.9 billion, compared with RMB229.4 billion in 2015, according to the NSSF's annual report. The fund posted realized gains of RMB91.6 billion, but it recorded a loss of RMB59.7 billion on publicly traded assets including bonds, stocks, and securities investment funds.
NSSF's annualized investment return since its inception in 2000 is 8.37%, with cumulative investment profits totaling RMB822.7 billion.
NSSF manages capital from the Ministry of Finance, individuals, and local pension funds in Guangdong and Shandong provinces. Domestically, it invests in bonds, trust products, stocks, securities investment funds, and private equity. Its PE exposure includes fund and direct investments.
In terms of overseas investments - which account for RMB136 billion in assets - NSSF tends to be more conservative, building its portfolio around bank deposits, bonds, stocks and securities investment funds.
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