China’s Social Security Fund, the strategic reserve fund that complements the country’s basic pension funds, achieved an 8.1% investment return in 2024, equivalent to 218.42 billion yuan ( US$30.68 billion ), marking its best performance since 2021.

The fund, setup in 2000, is designed to supplement and stabilize the broader social insurance system in an increasingly ageing society by pooling resources from central government allocations, state-owned capital transfers and investment proceeds with a focus on long-term growth through diversified investments. The fund currently has 59 portfolios under the management of 18 domestic asset managers.

The National Council of Social Security Fund ( NCSSF ), the fund’s ultimate administrator, says the rebound of China’s stock market in the second half of 2024 and its prudent investment strategy boosted the fund’s annual performance in 2024. The annual return rate for the fund since its inception is averaged at 7.39%, earning over 1.9 trillion yuan in cumulative.

Source: National Council of Social Security Fund

The fund’s total assets under management ( AUM ) at the end of 2024, according to its annual report, reached 3.32 trillion yuan, growing by about 10% compared with the previous year.

Notably, 948.5 billion yuan, or 28.55% of the assets, are directly managed by the NCSSF itself, which invests in bank deposits, trust loans, equity investment, etc., while the remaining 71.45% are managed by mandated asset managers, whose portfolios cover domestic and overseas stocks, bonds, securities investment funds and overseas financial derivatives.

The pension fund’s investments are predominantly concentrated in the domestic market; however, its allocations to overseas assets have been increasing in recent years. In 2024, 28.84 trillion yuan, or 86.82% of the fund, were allocated to assets in the onshore market, while 437 billion yuan, or 13.18%, were invested in overseas portfolios, representing an increase of 9.02% from 2021.

As a long-term investor, the fund, the NCSSF notes, will continue its commitment to promote sustainability by increasing its direct investment in clean energy to accelerate the country’s decarbonization mission.

And, the fund, the NCSSF adds, aims to incorporate sustainable investment metrics into the performance evaluation of its mandated asset managers; and, the council adds, it will strengthen its communication with international sustainable development institutions on the promotion of sustainable investments.