Research On The Diversified Investment Of The Basic Endowment Fund Of China

The basic endowment insurance fund is an important part of endowment insurancefund system in China, and it plays an important role in the payment of pensions.However, the basic endowment insurance fund investment income is low because of thelimited investment tools which cover deposit and bonds. That makes it difficult topreserve and increase the value of the fund. Because of the increasing rate of inflationand the aging of the population has deepened, it is more and more important to remainand increase the value of the fund. Therefore, the diversification of investment underguarantee of the safety of fund is an effective way to deal with inflation and populationaging ability to pay for basic old-age insurance fund challenge.China’s basic old-age insurance fund is composed of the social pooling fund andpersonal account fund. The social pooling fund is for the payment of current retirees’pension insurance, and the personal account fund is a kind of self accumulation pensionfund, for the payment of pension after retirement. Until the end of2012, China has13provinces and cities consist of Liaoning, Heilongjiang, Jilin, Tianjin, Shanxi, Shanghai,Jiangsu, Shandong, Henan, Hubei, Hunan, Xinjiang, to join the ranks of trials to fillingthe personal accounts, so the individual account fund accumulation amount increasedyear by year. The diversification of investment of individual account is an important wayto achieve value added basic pension insurance fund.Through analysis on the situation of investment and operation status of theinvestment operation of China’s basic old-age insurance fund and the national socialsecurity fund, this article analyzes China’s basic old-age insurance fund investmentoperation problems. Based on the successful experience of international pension fund andthe national social security fund investment diversification on the related model, andusing the portfolio theory,the paper calculate and return and risk of China’s basic old-ageinsurance fund when the fund invest in bank deposits, treasury bonds and the ShanghaiComposite Index among different asset allocation situation, What’s more,the article try tomake a reasonable choice of asset allocation for the diversification of investment in basicpension insurance funds.At the same time, the article puts forward reasonablesuggestions for China’s basic old-age insurance fund investment diversification. There are six part in this artical.The first part is introduction. This part introduce theresearch background and significant and so on, and give a brief introduction of researchresult all over the world. The first part of the main part is related concept and theoreticalfoundation. The second part introduce the current situation and problems of the basicendow fund. This part describe the invest model, the asset allocation, the benefit ofendow fund and National Social Security Fund by analyzing related datas.What’s more,the article illustrate the necessity of the multi-variety investment. The third part is themost important part of the article. This part use the investment portfolio theory tocalculate the risk rate and benefit. And trying to choose the investment portfolio for theendowment insurance fund and list the possiblity of the multi-variety investment. Theforth part is the experience reference. This article introduce the endowment insurancefund investment method of America, Chile and Singapore, and hope to learn theexperience.The last part is the policy suggestion. The article try to provide some advicesfor the investment.