December 17, 2021
The year 2021 marks the 10th anniversary of the launch of entrusted asset management business of China Insurance Security Fund Co., Ltd. (“CISFC”). Over the past decade, under the support and guidance of the China Banking and Insurance Regulatory Commission, Ministry of Finance, and the People’s Bank of China and on the basis of the joint efforts of the investment managers, custodian bank, and investment advisor for CISF’s entrusted assets, CISFC has provided a solid funding source for ensuring the effective functioning of CISF by following the investment philosophy of “putting safety first while seeking stable value growth” in the entrusted asset management business.
As of November 30, 2021, CISF had a balance of RMB 179,288 million; and a principal of RMB 24,720 million in its entrusted assets. Since the entrusted asset management business was unveiled in 2011, CISF’s entrusted assets under management has seen a nearly 25-fold growth in their principal, a total investment return of nearly RMB 5 billion, and an average annualized ROI of 5.02%. CISFC has performed well in achieving the goal of maintaining and increasing the value of CISF’s assets, while ensuring their safety and liquidity.
Over the past decade, CISFC has achieved notable results in the management of CISF’s entrusted assets. Since the introduction of the entrusted asset management business, CISFC has developed a management mechanism featuring the distribution of responsibilities, cooperation, and checks and balances among the principal, managers, custodian, and investment advisor, and an asset management platform with characteristics specific to CISF; and appointed one custodian and one advisor and increased the number of managers from 5 to 13, including pension managers and fund managers in addition to insurance asset managers. In terms of investment management, CISFC has flexibly adjusted the investment strategies for well-timed allocation of funds, actively strived for policy support in duly increasing the investment proportion and scope of CISF’s entrusted assets, formulated investment guidelines for different types of portfolios, and continued to optimize the performance assessment mechanism. As for risk management, CISFC has improved the fundamental framework, refined the investment supervision approaches, and conducted inspection of the entrusted asset management business on a yearly basis and credit rating of the portfolio non-government bonds on a quarterly basis. As a result, no credit risk incident has occurred. Through these efforts, CISFC has effectively fulfilled its political duty to ensure the safety of CISF’s assets and serve the resolution of risks.
The new situation and characteristics of international and domestic macroeconomic development bring novel opportunities and challenges for the insurance industry and fresh tasks and requirements for the financial market and bond investment. Considering this, CISFC will continue to work with the investment managers, custodian, and investment advisor to preserve and grow the value of CISF’s entrusted assets and promote the long-term development of the entrusted asset management business for the continual enhancement of CISF’s capacity against industry risks. Specifically, CISFC will together with them: (1) elevate the political stance and perform the basic task of industry risk resolution to jointly maintain the overall financial stability; (2) step up efforts on research and innovation and enhance the management of portfolios to improve capabilities in preserving and increasing the value of CISF’s entrusted assets; (3) strengthen risk control awareness and risk management to jointly ensure the safety of CISF’s assets; and (4) enhance strategic cooperation and give play to the role of the entrusted asset management platform to jointly improve the asset management results for CISF.