China pension fund to raise overseas investment cap

08:09, December 18, 2009      

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China's National Council for Social Security Fund plans to lift the limit of the ratio of overseas investments to 20 percent from the current 7 percent, according to the China Securities Journal report Thursday, citing Dai Xianglong, the fund's chairman.

The fund also plans to invest in privately-held overseas companies and overseas funds.

The ratio of investments in fixed-income products will be reduced and the ratio of equities investments will be maintained, according to Dai.

He explained that the fund's investments on equities do not aim to "pursue the rising ones and kill the falling ones". What the fund does is to sell equities when the market value of the equities and the investment ratio of the equities are high, and to invest in equities when the market value and the ratio are low.

By the end of October this year, the total assets of the fund have amounted to 700 million yuan ($102.5 million). Within that amount, the investment on equities reached 32 percent, the investments on fixed-income products was 46 percent, and the investments on the cash and equities of unlisted companies accounted for 22 percent.

Also, Dai said the average rate of return on investment (ROI) of the fund in nine years was 9.44 percent, and after deducting 2.08 percent for the rate of inflation, the actual ROI was 7.36 percent.

The fund was established in August 2000.

Source: Global Times
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