(ECNS) - China Asset Management has launched the country’s first pension target fund as a total of 14 such funds approved earlier this month are expected to hit the market in September.
Pension target funds are mutual funds that encourage long-term holdings by investors, adopt mature asset allocation strategies and control risk of volatility to seek long-term, stable returns on retirement savings.
Insiders believe the latest go-ahead by the China Securities Regulatory Commission is good news for the A-share market as liquidity will be improved.
Yang Delong, chief economist of Shenzhen-based Qianhai First Seafront Fund, said the policy will bring more capital to stabilize the stock market.
China Asset Management, China Southern Asset Management, Bosera Asset Management, E Fund Management and 10 other asset management companies became the first batch to receive regulatory approval.
Currently, China's retirement plans rely mostly on state and corporate-sponsored programs. The country is looking to develop pension target funds, part of individual retirement plans, to complement the system amid demands from an aging society.
Sources from Hengtian Wealth Management said the new funds have been established to pursue long-term steady appreciation of pension assets, so investors should have reasonable expectations on returns.