After the Shanghai stock index fell below 2900 points, the market generally believed that the medium and long-term allocation value of A-Shares had been realized, and the voice of long-term funds entering the market was getting higher and higher. On April 28, public funds, bank financial management and many industry analysts interviewed by the reporter of Securities Daily believed that there was a large space for multi-channel long-term funds such as insurance funds, pensions, public funds and bank financial management to enter the market.
“Raising the upper limit of the proportion of equity assets held by pensions and insurance funds can increase the proportion of equity investment. At present, the proportion of equity in public funds is high, and the scale of bank wealth management equity products is small, so it should be the main force of incremental funds in the future.” Wei Fengchun, chief economist of ChuangJin Hexin fund, said in an interview with the reporter of Securities Daily that not only public funds, but also funds of other professional institutions should establish the concept of long-term investment and value investment.
increase the probability of insurance capital and A-share allocation
bank financial management has a large development space
Since the meeting of the financial committee of the State Council in March proposed to “welcome long-term institutional investors to increase their shareholding ratio”, the CSRC, the CBRC and other regulatory authorities have made frequent statements, and a number of measures have been implemented.
According to the data of China Banking and Insurance Regulatory Commission, by the end of 2021, China’s insurance fund utilization balance was 23.2 trillion yuan, of which 2.5 trillion yuan was invested in stocks and 0.7 trillion yuan was invested in equity funds. In addition, the balance of portfolio insurance asset management products issued and managed by insurance asset management companies is 3.2 trillion yuan, mainly invested in bonds, stocks, etc.
“In the future, the probability of insurance funds will increase their holdings of A-share companies.” Liu Chao, Huaan Securities Co.Ltd(600909) co chief strategist, said in an interview with Securities Daily that insurance funds are huge and play an important role in the process of converting residents’ savings into investment, as well as fulfill the social responsibility of supporting the development of the real economy, and investing in A-Shares is an important way to achieve the above purpose.
Liu Chao believes that from the perspective of yield, under the background of the downward movement of the interest rate center, non-standard investment also faces certain restrictions. If you want to maintain a stable yield, you can gradually increase the proportion of stocks and funds in the portfolio.
“From the perspective of accounting standards, under IFRS 9, insurance funds are encouraged to invest in listed companies with stable dividends, while reducing the impact of fair value fluctuations. Increasing the holding of high-quality stocks by insurance funds also plays a role in stabilizing the market to a certain extent.” Liu Chao further said.
From the perspective of bank financial management, “at present, there are few bank financial management equity products, and some ‘fixed income +’ products will be configured with a shares.” A subsidiary of a securities daily told reporters.
tax preference mode
is the key to promoting the entry of individual pension into the market
For pension investment, according to the public data of the Ministry of human resources and social security, the reporter of Securities Daily sorted out that in terms of the first pillar (basic endowment insurance fund), by the end of 2021, the cumulative balance of the three basic endowment insurance funds was 6.8 trillion yuan, and the equity investment amount of the basic endowment insurance fund was 1.46 trillion yuan. In terms of the second pillar (enterprise annuity), by the end of 2021, the accumulated scale of enterprise annuity in China had reached 2.64 trillion yuan, including 2.19 trillion yuan of equity investment funds.
“At present, the first and second pillars of China’s pension system have a high proportion of entering the market, and the third pillar is still in its infancy, but there is great potential for individual pension expansion.” Chen Li, chief economist of Chuancai securities and director of the Research Institute, told the reporter of Securities Daily.
Recently, the general office of the State Council issued the opinions on promoting the development of individual pensions. Promoting the entry of long-term pension funds into the market plays a vital role in the healthy development of the capital market.
Citic Securities Company Limited(600030) chief economist Mingming said in an interview with the reporter of Securities Daily that to promote the entry of pensions into the market, we should first establish an actuarial system as soon as possible and regularly calculate the long-term, medium-term and short-term income and expenditure of China’s basic pensions, so as to avoid a large amount of fund balance from being unable to participate in market-oriented investment; Second, we should timely introduce a stronger tax preference system and a direct subsidy system for low-income people. At the same time, we should consider opening up the capital flow between the second and third pillars, expanding the source of funds in individual pension accounts and encouraging funds to enter the market; Third, pay attention to the construction of talent team, strive to innovate investment methods, enrich product system, and improve capital use efficiency and income level.
“The tax preference model of China’s individual pension is the key to promoting the entry of individual pension into the market.” Chen Li said that referring to the experience of the American individual retirement account (IRA) system, considering that China’s individual pension is still in its infancy and the subsequent tax preference model remains to be determined, the adoption of diversified tax preferential policies plays an important role in promoting the entry of individual pension into the market.
In Chen Li’s view, pension and social security funds are typical long-term investment funds, and security and stable income are the main factors to be considered. In the current context of steady growth, sustained policy efforts are conducive to promoting steady economic growth and boosting market confidence. From the perspective of liquidity, although overseas interest rate hikes and table contraction are expected to be strong, under the joint force of China’s fiscal and monetary policies, China’s liquidity is expected to be still reasonable and abundant, and there is no need to worry too much about overseas tightening. From the perspective of valuation, excluding the data of financial stocks, the overall valuation of the current market is close to 2018 and has a certain bottom range allocation value.
public funds need to enrich product types
comprehensively improve business capability
By the end of 2021, the scale of equity funds in public funds was 9 trillion yuan, accounting for 35.2%. The circulating market value of A-Shares held by public funds was 6.4 trillion yuan, accounting for 8.1% of the total circulating market value of a shares.
On April 26, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry, proposing to strengthen the long-term incentive and restraint mechanism, improve the core competence of investment and research, and strengthen product and business innovation.
“The opinions emphasizes promoting the enrichment of public fund products, focusing on equity funds, index products, ETF products, low and medium volatility products (pension investment products). The development of equity funds will directly bring long-term and stable funds to listed companies. The development of pension investment products is also of great significance for introducing long-term funds and optimizing the investor structure of capital market.” Boshi fund stakeholders said in an interview with the reporter of Securities Daily.
“Whether residents are willing to invest in the stock market is very important.” Wei Fengchun said that the improvement of valuation depends on corporate profits and liquidity.
Turning to how to attract residents to entrust public funds for investment, the above-mentioned person of Boshi Fund said that public funds should adhere to the interests of investors as the core, comprehensively strengthen professional capacity-building, comprehensively improve their ability and quality and establish sustainable competitive advantages from three aspects: core investment and research ability, compliance risk control ability and product and business innovation ability.
“After the early correction, A-Shares have a good medium and long-term allocation value.” Boshi Fund said that under the pressure of economic growth, the determination of macro policies to help stabilize growth remains unchanged, and the policy level continues to release positive results. The central bank’s RRR reduction again is also to release low-cost funds and increase support and services for the real economy. The monetary policy remains stable and loose, and liquidity continues to remain reasonably abundant, providing support for the medium and long-term improvement of a shares.
