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China is letting its huge pension fund invest in domestic stocks

Note from Editors:
Previously, China’s pension can only be invested in treasury bonds and bank deposits. Now, it can be locally invested in , convertible bonds, and infrastructure projects.

by AFP
Beijing (AFP) – China will allow its huge state pension fund to in domestic in the wake of a massive market sell-off, it was announced Sunday.

The fund will be able to invest up to 30 percent of its net assets in equities, according to final guidelines from the State Council (cabinet) quoted by the official Xinhua news agency.

The fund, to which workers must contribute, had 3.5 trillion yuan ($548 billion) in net assets at the end of 2014.

The move could allow the fund to invest billions of yuan into domestic equities after a stock market rout forced the government to take emergency support measures.

Xinhua depicted the decision as an attempt to boost returns as China struggles to care for its increasing elderly population.

But it acknowledged the recent decline in the nation’s stock markets.

Read the full article:

Curated from China to allow pension fund to invest in stocks – Business Insider

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