Study Of Investment Behavior Of Pension Funds

With the arrival of the ageing of the population, the concern and research of the pension funds has become a hottest topic in the current time. Starting with the environment and system variables, using the method from the behavioral finance, this paper is trying to discuss it.Lacking of investment tools, without a fully developed market development is the reality of conditions we have to face. Meanwhile we assume that the pension fund trustees and managers are not rational and non-neutral when facing the risks. So, the pension funds psychological account is not only exists but also beneficial to avoid risks.Specific to the investment strategy, according to the characteristics of debts, it should be emphasized to take life-cycle investment strategies to fulfill the its liquidity demands and the change of the risk preferences. The choosing from securities and the timing of making a deal is very important to us.With the facts that the phenomenon of the combination of China's social security funds' cross-shareholdings is not obvious, we concluded it is because the pension funds Management Company's bottom-out system. It encourages the funds to imply a more active management. But we also find out that the pension funds and other funds the company runs always appear in a listed company's in the top 10 shareholders. One reason is because the decisions are made on the same information system, the other is the pension funds of funds can be used as an inter-agency a bargaining chip in the game. And we also get the conclusion that China's pension fund managers has disposition effect.Finally, the paper discussed how the investment behaviors of pension funds influence the China's capital market and the financial stability. Due to small scale, its impact is limited. But in the future, with corporate pension and social security funds development, they will have a greater impact.