The countdown for the Spring Festival has entered, and medium- and long-term funds have accelerated their entry into the market to welcome good news. The "Implementation Plan for Promoting the Entering of Medium- and Long-term Funds in the Market" (hereinafter referred to as the "Implementation Plan") jointly issued by the Central Financial Office, the China Securities Regulatory Commission, the Ministry of Finance and other six ministries and commissions recently was considered to be the "construction drawing" for the entry of medium- and long-term funds into the market. Wu Qing, chairman of the China Securities Regulatory Commission, said at a press conference held by the State Information Office on January 23 that "big events are not enough to be overnight, and we cannot celebrate the New Year."
This "big event" related to the capital market not only clarifies the hard indicators for medium- and long-term funds entering the market, but also makes targeted institutional arrangements from the establishment of an assessment system, investment policies, and market ecological construction that adapts to long-term investment.
According to the Implementation Plan, the market value of A-shares held by public funds will increase by at least 10% each year in the next three years, and we will strive to invest in A-shares by 30% of the annual premiums from 2025. All types of medium and long-term funds must be fully established and implemented for more than three years of long-term assessment, significantly reduce the weight of the operating indicators of state-owned commercial insurance companies in the current year, and refine and clarify the arrangements for the national social security fund for more than five years of long-term assessment.
"For the entry of medium- and long-term funds into the market, this is a very important institutional breakthrough. It can be said that solving problems that have not been solved for many years." Wu Qing analyzed that implementing long-term assessments can effectively smooth out the impact of short-term market fluctuations on performance. He said that the implementation of the "Implementation Plan" will further improve the equity allocation capacity of medium- and long-term funds, steadily expand the scale of investment, improve the supply and structure of capital market funds, consolidate the good situation of the recovery of the capital market, and help medium- and long-term funds improve long-term investment returns, better practice the concepts of long-term investment, value investment, and rational investment, and realize a virtuous cycle of medium- and long-term funds preservation and appreciation, stable and healthy operation of the capital market, and high-quality development of the real economy.
Cultivate a value investment ecosystem
As an important professional investment force in the capital market, medium- and long-term funds such as public funds, commercial insurance funds, pensions, etc. are considered as the "ballast stones" and "stabilizers" to maintain the stable and healthy operation of the market. One of the practical cases in my country is that the national social security fund participates in stock investment. From the perspective of investment returns, the average annualized rate of return of investing in A-shares in more than 20 years since the establishment of the national social security fund reached 11.6%.
