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China’s National Social Security Fund shifts towards external managers

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China’s National Social Security Fund (NSSF), which manages the country’s biggest pension fund, recorded a 6.2% return on investment in 2013, with an increased proportion of the fund being managed by external managers, according to its annual report released earlier this week.

The $200bn (€146bn) fund earned CNY68.6bn (€8.1bn) from its investments in 2013.

The rate of return was lower than the 7% recorded in 2012 but higher than the 2.6% inflation rate during the period, according to the report.

The fund’s average return since its inception is about 8.13%.

The proportion of the fund managed by external mangers rose to 46% last year from 41% in 2012.

About one-third of the return came from its investments in equities.

Approximately CNY109bn, or 10% of the fund’s assets, originated from a mandate from the Guangdong provincial government.

The report said about CNY49bn was invested in short-term debt.

The NSSF provided no further details on its asset allocation.

The assets of the funds are sourced mainly from the central government’s budget, state-owned enterprise share sales and the state lottery.

The NSSF is a strategic reserve fund set up by the Chinese government in 2000 to help cope with the country’s ageing population.

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