Pensions are long-term funds. The ideal long-term annualized rate of return on pension investment should be no less than 7%, the actual annualized growth rate of wages over the past forty years. This is especially true for young people, who should take the initiative to take reasonable risks to increase the long-term rate of return. So how do you strive to achieve such returns while taking into account risks?
The pension financial products currently on the market are mainly divided into four categories. According to the risk level from low to high, they can be divided into protection-type commercial pension insurance , value-preserving pension savings products, value-added pension financial products and investment-type pension target funds. Up to now, the national social insurance public service platform has announced the "Personal Pension Product Catalog", which includes 129 fund products (all pension target FOF) and 7 insurance products. In the future, other personal pension products may also be launched one after another.
Compared with other products, public funds have outstanding equity asset allocation capabilities. Increasing the allocation ratio of equity assets will help increase the long-term compound rate of return. At the same time, the product has the advantages of simple structure, high transparency, and Y-type preferential fee rates.
Ideal pension investment, the ability to allocate equity assets is crucial.
Pensions are long-term funds. The ideal long-term annualized rate of return on pension investment should be no less than 7%, the actual annualized growth rate of wages over the past forty years. This is especially true for young people, who should take the initiative to take reasonable risks to increase long-term rates of return. So how do you strive to achieve such returns while taking into account risks?
The ability to allocate equity assets is the key to success. It is necessary for investment pension target funds, especially target date funds with higher equity positions , to be added to our allocation. As of the end of September 2022, among the first batch of nine funds included in personal pensions by China Asset Management, the average annualized return of products established for more than one year was 7.33%. Among them, the average annualized return of three target date funds established for more than three years reached 9.23%. Excellent equity investment performance can help everyone obtain relatively ideal investment returns over the long period of time. (Data source: Wind, fund periodic report, as of 2022.09.30, the past performance and net value of the fund do not predict its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. )
Public funds can better leverage the long-term advantages of pension funds.
Equity assets are highly compatible with long-term personal pensions. If you choose different investment categories, the investment costs under different investment returns will vary greatly. Assume that an investor starts regular monthly investment and financial management at the age of 30, retires at the age of 60, and has an asset target of 2 million. For example, if an investor achieves an asset target of 2 million through fixed investment in financial product , assuming that the annualized return can reach 4%, then a monthly fixed investment of about 2,900 yuan is required, which is a large investment expenditure. However, if the pension product chosen by the investor can achieve an annualized rate of return of 10%, he or she only needs to make a fixed investment of about 960 yuan per month, which can greatly reduce the monthly investment expenditure.
Looking back at the performance of major asset classes in the past 10 years, equity funds and stocks have the highest return rates. The annualized return rate of the ordinary stock fund index in the past 10 years is 16.32% (data source: Wind, statistical interval is 2011.1.1 to 2021.12.31). If you do not give full play to the advantages of long-term investment in retirement and invest in some low-risk products in order to reduce short-term fluctuations, it will be a pity to lose future investment income.
Public fund products operate transparently and have a simple structure
In addition to outstanding equity asset allocation capabilities, public fund products also have the advantages of simple structure, high transparency, and preferential Y-category rates.
First, the product structure of public pension funds is simple, investing only in standardized products, and is easy to understand and accept; Second, pension target funds refer to publicly raised securities investment funds that aim to pursue the long-term and stable appreciation of pension assets, encourage investors to hold them for a long time, adopt mature asset allocation strategies, and reasonably control the risk of investment portfolio fluctuations.This type of fund usually operates in the form of FOF, with more than 80% of fund assets invested in public funds, which smoothes risks twice, solves the problem of base selection and timing, and improves the long-term risk-return ratio.
Third, public funds information disclosure have stricter requirements, have unified information disclosure channels, and the disclosure content is relatively detailed, and the transparency of product operations is far superior to other types of investment products;
Fourth, Class Y shares are established for personal pension accounts and are merged with the original shares for investment management. There is no difference in fund investment operations or fund managers, but they enjoy preferential rates.
After 20 years of pension investment management practice, China Asset Management has built a complete pension investment management system, ranking at the forefront of the industry in terms of management scale and number of portfolios. As of the end of 2021, the pension scale of managed by China Asset Management exceeded 350 billion yuan (data source: National Council for Social Security Fund, Ministry of Human Resources and Social Security, China Asset Management, 2021.12.31).
As a "pioneer" in pension management and pension target fund operations, China Asset Management is one of the first domestic pension target fund managers. It has basically completed the layout of target date series pension funds and is the fund manager with the largest number of pension target funds managed in China, achieving full coverage of retirees from 2030 to 2060.
is also equipped with a strong investment research team. It was the first in the industry to establish an asset allocation department and one of the most powerful FOF investment research teams. It is fully responsible for the investment management of FOF products such as pension target funds and is committed to providing more assistance for the retirement life that investors long for.
Risk warning: 1. The name "pension" does not represent income guarantee or any other form of income commitment. The pension target fund does not protect its principal and may suffer losses. Investors must understand that pension target funds are only part of a complete retirement plan. A complete retirement plan includes basic pension insurance, enterprise annuities and pension investments purchased by individuals. 2. The opinions in this material are for reference only and do not serve as any legal document. All information or opinions expressed in the material do not constitute final operational advice on investment, law, accounting or taxation. Our company does not make any guarantee regarding the final operational advice based on the content in the material. Under no circumstances will our company be responsible for any losses caused by anyone using any content in this material. 3. Investors should fully understand the difference between regular and fixed-amount investment of funds and savings methods such as lump sum withdrawals. Regular fixed-amount investment is a simple and easy investment method that guides investors to make long-term investments and average investment costs. However, regular fixed-amount investment cannot avoid the risks inherent in fund investment, nor can it guarantee investors' returns, nor is it an equivalent financial management method that replaces savings. 4. The fund manager reminds investors of the "caveat emptor" principle in fund investment. After investors make investment decisions, investors are solely responsible for the investment risks caused by the operating conditions of the fund, price fluctuations of fund share listings and transactions, and changes in the net value of the fund. Fund managers, fund custodians, fund sales agencies and related institutions do not make any commitments or guarantees about fund investment returns. 5. Before investing in the fund , investors should carefully read the fund's "Fund Contract", "Prospectus" and "Product Information Summary" and other fund legal documents, fully understand the risk-return characteristics and product characteristics of the fund, carefully consider the various risk factors that exist in the fund, and fully consider their own risk tolerance based on their own investment purposes, investment period, investment experience, asset status and other factors. Based on understanding of the product situation and sales suitability opinions, make rational judgments and prudent investment decisions, and bear investment risks independently. 6. There are risks in the market, so investment needs to be cautious.
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