Sina Finance News on October 28th by the China Association of AIMA, CAIA Association, CFA, Henglisi, APEX, Chicago Mercantile Exchange and other associations and institutions held the "fourth annual meeting of hedge funds China" in Beijing Kang The Ryder Hotel is held. Li Na, director of the National Council for Social Security Funds, attended the meeting and gave a speech on “Thinking about pensions: What will be opportunities and challenges in 2018?”. She said that the world is currently seeing data on the global pension fund size of 30 trillion US dollars, especially worth noting that the Asia-Pacific pension scale reached 15.7 trillion US dollars, an increase of 6.1% over the previous year, surpassing other global pension funds. I realize that global opportunity investors are paying more and more attention to pensions in the Asia Pacific region. Our pension agency should have been in the past. Since 2000, our average rate of return is 8.37. I feel that I have done a good job, but if we see others better than we do, we will catch up.

Li Na

The following is a record of the speech:

Moderator: Thanks to Mr. Zhu for his speech, and today the forum officially begins. First of all, let us welcome Li Na, the director of the National Council for Social Security Funds, to give a speech on the theme of "The pension fund thinks: what will be the opportunity and challenge of 2018". Everyone applauds!

Li Na: Thank you, Mr. Zhu, for giving this opportunity to China. I guess putting me in front is because everyone worked hard for a week, and I took some leisure articles on Saturday morning. I saw all the elites in the room. I am going to talk to you today about the investment and thinking I have personally observed about pension investment. If you are not appropriate, please criticize and correct.

First of all, let me personally think that pensions must assume the function of a very important intergenerational rational investor, which may be more clear in mature countries. For example, one-third of the capital of the US capital market comes from pensions, and pensions play a very important role in the mature rationality of the entire market. We have observed that from 2008 onwards, global pensions in 2008 have undergone major changes in the financial markets in which they are invested, and pensions have also suffered considerable losses. However, since then, pensions have undergone great changes from institutional design and pension council governance to pension investment. These changes are also tangible.

First of all, from the perspective of institutional design, the idea of ​​DC that I originally sorted out from the World Bank is actually changing to a new one. It turned out to be a change from a definite treatment type to a defined payment type, but the payment-determined type has certain obstacles to pensions. Therefore, we have observed that there are DA and TB models in the world, that is, the deterministic and target welfare types, both of which are It is the middle ground between the term treatment determination type and the payment determination type. It tries to gain the advantages of both to avoid the disadvantages of the two and achieve a good balance. Countries like the Netherlands in Austria have seen some changes, and we are constantly researching them.

More governance will consider whether the board is sufficiently representative from the perspective of pension governance. But there must be sufficient professionalism in representation, and this is where we now see the promotion of pensions.

The world is currently seeing data on the global pension fund size of 30 trillion US dollars, especially worth noting that the Asia-Pacific pension scale reached 15.7 trillion US dollars, an increase of 6.1% over the previous year, surpassing other global pension funds. The sum of the first pillar and the second pillar of the basic pension of our country, the scale of the national social security fund of about 2 trillion yuan, the scale of the enterprise annuity of 1.1 trillion yuan, and the combination of these three pillars is already about 6 , the scale of 7 trillion. In the same period, we also observed that the scale of pension assets in Taiwan in our country is also growing, including India and Vietnam are growing. I realize that global opportunity investors are paying more and more attention to pensions in the Asia-Pacific region.

Fan is always an asset allocation expert. Let's talk about the traditional resource allocation of pensions. For example, Norway is a stock, bond, and real estate. Japan is actually a traditional stock bond type. In recent years, Japan’s stock bond allocation has changed a lot, but It can now be seen that its overseas stock ratio has accounted for 25% plus or minus four, which is a very important change after Abenomics.

In fact, Canada CPPIB is also more recently discussed, including our institutions are also in-depth study. Canada is also a process of continuous diversification, which involves the integration of real estate, alternative investments, various domestic markets and overseas markets into his investment framework. The cumulative yield of CPPIB over the past decade is above 10%. Our organization should have been in the past. Since 2000, our average rate of return is 8.37. I feel that I have done a good job, but if we see others better than we do, we will be brave.

There is also a risk-balanced configuration. We observed HP like Denmark, who said that we are using a risk-balanced strategy to configure pension institutions. But we actually observed that because we are constantly learning, within the scope of our current understanding, Risk Parity is more used in the combination strategy level, and it is less used in the specific content. Moreover, when the stock market rises unilaterally, it actually does not perform well from the overall large portfolio income. This is reflected in the fact that US stocks have grown in the past few years, and commodities are relatively low in terms of assets. The risk exposure exposure of each type of asset is 1/5, which is low-allocation stock assets, and other assets with poor performance. Therefore, some regions use risk-balanced strategies, and they have not performed better, so I also saw The industry is doing some related adjustments.

There is also the possibility that 2008 may have an important impact on global asset allocation. We observed that after the financial crisis, it seems that within a country and within a region, the risk analysis effects of different asset classes are weakening. For example, the strict negative correlation between stocks and claims has changed in many cases. It is also common in the country to see what kind of debt double-killing, or the situation of chickens and dogs rising to the sky is often found. However, the risk effects of different country regions are quite obvious. This may be determined by the fact that what we are seeing is the period of the different economies in which they are located, and the synchronization of this cycle is still within the scope of our current observation. More common, such as the US recovery, China, Europe, Japan, in fact, they still have a mismatch in the rhythm, not synchronized, and this is precisely the possibility of this different assets, different countries, different regions of the asset dispersion .

Now let's talk about our current understanding of various assets. We still think that we should make long-term active investment. This is what we just said. It is important to screen Canada's CPPIB for his investment philosophy for the past ten years. The transformation. We believe that short-term active investment does not create value. Long-term passive investment also undermines the creation of value, because you do not create α, but only long-term active investment can create value. Pensions, on the other hand, are able to achieve the concept of long-term active investment and its implementation. The initiative here includes both the expansion of investment scope and the extension of investment channels, including the deployment of many places, but one of the most important strategies is to participate in corporate governance, join the board of directors, and even manage the company to some extent. In this way, to achieve the optimization of governance and enhance the creation of enterprise value, Buffett may be mentioned here. In fact, Buffett is a long-term active investment, and even replaces the management team and personally acts as the chairman.

Speaking of fintech, we observed that big data is indeed the case that these two have been produced in some specific cases, but artificial intelligence and blockchain actually we have seen very well in this industry. Come out, we feel that this is in a cloud. Because we understand that the role of technology is to significantly improve efficiency, reduce costs, and then break through the 28-year law of the original profit, can serve customers who have no economic value in the past. There are also applications in weak credit scenarios, such as insurance, support, enhancement, and trusting trust. Last year, I suggested with the leadership of the Ministry of Personnel. In fact, whether the payment of the five insurances and one gold of our social insurance can consider the technology of the blockchain, because there are also empty ones in this field, and there are also those who take the lead, and the blockchain is still in these aspects. Can be applied very well, but how to apply it remains to be seen. Because the central bank stopped the tokens some time ago, but these technically clear feelings still have to be considered.

Here I would like to talk about a few trends. In fact, when you talk about investment methods, there are only a few questions. Whether you are active or passive, whether you are outsourcing or outsourcing, whether it is absolute or relative. We believe that from the perspective of pension management, we think it should be more long-term active investment. But we did observe a phenomenon. We saw one of the fund companies called Vanguard Pioneer, Pioneer is a passive investment, and the other is an active investment. An interesting phenomenon has happened in the past year, and Pioneer has surpassed another company. I want to share here, I think everyone will discuss today that in the strict sense, my current understanding is to factor out the factors to invest, a certain type of factor can create a higher risk-to-reward ratio. We have observed that the GPIF in Japan in the Asia-Pacific region has begun to apply this strategy. Individual pensions in Taiwan are already using the Smart Beta strategy. Our country is currently useless, but it is like seeing home ten (sound), etc. Some companies are also trying to push such products, or do some products with Smart Beta on the basis of the original, but the overall scale is not very large at present, and more is an attempt at the beginning.

Insourcing and outsourcing may be a problem that we need to consider when we determine the investment method, whether it is a sovereign investment fund or a pension. As far as the global trends we are currently observing, it seems that the form of insourcing is more than outsourcing. In particular, there have been investments in the previous period, and there have been performances. After the cost data, he calculated that I still manage my money myself. Appropriate, of course, you have to manage more of the content that is related to the governance level, such as how to allocate the top 5 executives and ordinary employees, how to build the incentive mechanism, there is a very large knowledge. But the overall trend, we at least from the field of pension management, we see the inclusive. And it's very interesting that not only everyone but also everyone wants to be sure that the investment department or elites have some insourcing and outsourcing. Later, we found that even if we operate, we observe Australia's super annuities and other institutions. After years of data accumulation, they also learned. After how to do these methods, they feel that I can save money by doing this. This means that after the size of the funds is very large, even a BP and a BP can save money and create value for the ultimate beneficiary of the pension. But all the insourcing is based on the fact that you have enough people to do this, and the incentive mechanism is in place. The key is to do it. So we started outsourcing, and we learned that it was inclusive.

Absolute returns and relative returns, because the size of the pension is still relatively large overall. 30 trillion US dollars, such as Japan's GPIF, etc., especially in some small economies, its size may account for the relative proportion of the country's capital market, so more will pursue relative income, Not an absolute gain. But in fact, the education of this client is the person who entrusts the money to the pension council. How to educate his client and let him accept a relative income actually has a long-term process. I still want to share our own experience here, because we have been entrusted with local subsidies from local accounts in 2006. We communicate with local people's offices and finance departments almost every year. After many years, they finally accepted the concept of absolute income, which is high-risk and high-yield. Because we can see the comparison of our own income with the enterprise annuity, the average annual rate of return of the enterprise annuity to the present level of 6.5 is about 8.3, which is 1.2 percentage points higher than him. Moreover, in the process of communicating with the locals, it is obvious that the cadres from the local provinces are very worried. I heard that you have invested in the stock market. What have you done recently when the stock market has fallen? Are our money safe? However, after many years, we found that local leaders accepted it. We earned more than one point last year. We feel that we have prepared a lot of contributions to explain to local leaders how we have done this year is lower than usual. Later, I was particularly impressed by the local leadership. It is okay to say that it is high-risk and high-yield. It may be better next year. So I want to say that in the process of pursuing relative returns, it may be that communication with the client is also a long-term problem, and it takes time to consolidate.

Finally, there are a few thoughts: The first one is that everything is counted, and all can be measured and how we quantify it. Because I looked at today's agenda, and when we did something in our work, we all wanted to model, quantify, and finally come up with a few things to decide ABC. But recently we also chatted with some geopolitical people, and found that in fact, when we modeled the financial investment management model, there was a lot of things that could not be quantified. He gave an example at the time. He said that people are now, Dissatisfaction, resentment and even hatred between the nation and the nation, the state and the country, the region and the region, and even between religion and religion. When did you quantify it into the financial model? Then I said no.

This thing we talk about gray rhinoceros, black swan are risk measurement, we think that all things are mastered by the model, but many things we still have to put into the big environment of social and economic changes to consider, finance can never Being alone is dependent on the basic economic situation in which we are located. For example, the changes in all our asset classes in the past two years, the various types of investments in the secondary market and the primary market have a huge relationship with the macro regulatory environment. This piece of I personally thinks that my partner and I may not be able to pay attention to it in advance. I also want to remind everyone in the room to consider what it is.

The second thought is gray rhinoceros and black swan, gray rhinoceros is a high probability event, black swan is a small probability event. But because we are now investing, we will meet leaders and say how you want to be and how, but in fact, these goals will fight each other, what do you want? But in many cases it is both good and bad. Then we often don't have multiple goals and multiple tools. If there are many goals, it will give me a lot of tools and hands to execute, but in reality this is not particularly easy, so we must at least have priority.

The third is risk metrics, now because we are all measured by standard deviation. In fact, we are now in the field of investment management of pensions. We have seen that this is still a matter of risk, especially some industry experts who are doing some rethinking. For example, the difference between young people and the elderly, what is the biggest risk for young people? We understand very well for the elderly, that is, when a young company pays a pension when they are young, can they arrive in time at the beginning of next month. But for young people, is it appropriate to use the standard deviation as his risk measure? Later, we thought about it ourselves, and we also learned about it. We also saw some literature at home and abroad. The biggest thing that young people are eager for may be that I have insufficient ability to pay now. I can’t pay a lot of fees now, but I hope Your long-term investment income is higher, and I can enjoy a dignified, decent and guaranteed old age when I retire. But the fluctuations in the middle are fluctuating. As long as I can give me what I want when I retire, this time if I don’t measure it by standard deviation, I actually do it too conservatively. In the end, he did not reach his high rate of return. So we see that there are some products and models that have gradually had some life cycles in the field of pension investment management, including the DB and DC that I talked to at the beginning, and the change to DA and TB to go to the middle. In fact, he is also I hope that according to your age, this portfolio asset has a migration process, which is gradually adjusted to a low-risk income strategy based on your own individual characteristics.

The fourth one may be a little bit farther away. We always believe in finance as an ancient saying that the world’s great things are vast soups. In the past seven thousand years, we will find that the inferior disadvantages expel the pros and cons. Some things are actually better than advanced. Ignorance is more, this is also a reminder to consider. Because we firmly believe that if we do the right thing, we will be able to win something advanced, just give me enough time. But later found that for a product, an individual, a fund manager, this period may be different, and if you must expect the disadvantages to expel the natural laws of good and bad, the road is ruthless, running the sun and the moon, the road is unknown, It takes a long time to grow a long-term thing, so can we wait? What if we can't wait? This is for your reference only.

Finally, I ended up sharing two sentences. One sentence that I personally recognize is that Robert Morton is "financial is the optimal allocation of resources across time and space." I also have to play a key role in the reform of the supply side. I will share these things today. I would like to correct them in an immature place.

Sina statement: Sina's posting of this article for the purpose of transmitting more information does not mean agreeing with its views or confirming its description. Article content is for reference only and does not constitute investment advice. Investors operate on this basis at their own risk.

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