520 Fortune Festival ｜ How can ordinary investors achieve the asset allocation scheme of ＂social security-like＂ thinking with a small amount of funds？ The answer has been packaged, so click on the col
Every reporter | Yuan Yuan Every edited | Chen Xu
In recent years, when people talk about the accumulation of wealth, the word "stability" can’t be avoided. Those wealth stories that pass through the fog of the cycle often begin with a deep understanding of stability.
How can we maintain a stable income? The social security fund gives ordinary people a reference answer. The 2023 Annual Report of the National Social Security Fund shows that the social security fund achieved positive returns in 2023. Since its establishment in August 2000, the average annual return on investment was 7.36%, and the accumulated investment income reached 1,682.576 billion yuan.
Judging from the short-term investment income, although the performance of social security funds is tepid, the long-term accumulated income is good. Behind the stable return is the wisdom of large-scale asset allocation and the courage of countercyclical adjustment. It is precisely because of this that every move of social security funds has long been the focus of investors’ concern.
Returning to the individual, can we apply the allocation thinking of social security funds to the allocation of personal assets? On May 23rd, Zhao Zhongzhe, Assistant General Manager of Wealth Management Department of China Merchants Bank Beijing Branch, visited the "520 Fortune Festival" in national business daily, and discussed the topic of "how to build a scientific and quantitative asset allocation system for benchmarking social security investment".
During the dialogue, Zhao Zhongzhe deeply explained the allocation strategy of social security funds, and explained in detail how ordinary people can realize the asset allocation scheme of "social security-like" thinking with a small amount of funds.
"From 2001 to 2023, the average annual investment return rate of the National Social Security Fund reached 7.36%, and there were only three negative returns in 23 years, which fully proved the effectiveness of asset allocation in the long-term dimension." Zhao Zhongzhe introduced that the asset allocation of social security funds is mainly divided into three categories, namely, equity assets, bank deposits and national debt assets, corporate bonds and financial bonds. From the perspective of proportion, the upper limit of allocation of social security fund’s stock assets is 40%, the lower limit of allocation of assets such as bank deposits and government bonds is 40%, and the upper limit of allocation of assets such as corporate bonds and financial bonds is 20%.
Around this thinking, China Merchants Bank has also launched a scientific allocation method suitable for ordinary users. In summary, there are four key links, namely: defining the upper limit of aggressive investment, dynamically managing equity positions, balancing the allocation of portfolio style and continuously optimizing product portfolio.
It is reported that China Merchants Bank’s TREE asset allocation system mainly aims at the first two links, that is, based on the wealth stage and risk level of customers, combined with China Merchants Bank’s many years of wealth management experience and asset allocation practice cases, to generate personalized suggestions, such as the upper limit of aggressive investment for customers with high risk appetite will be higher. At the same time, China Merchants Bank will help customers to optimize the configuration structure more conveniently and quickly through continuous inspection and scientific tools, and calmly cope with market changes.
Libra AI optimization system mainly aims at the latter two links, namely, combination style balance and product optimization, thus forming a scientific closed-loop investment in the whole process of benchmarking social security. Zhao Zhongzhe introduced that the Libra AI optimization system was exclusively developed by China Merchants Bank Beijing Branch. This system is different from the traditional tools that only looked at products in the past. It combs and examines the position styles of customers’ partial stock funds from a combined perspective, and constantly optimizes the position structure according to market changes. While balancing the style, the products are refined and preserved, so as to adapt to the current capital market with rotating styles, and achieve style balance and product optimization in one stop.
"It doesn’t sound complicated, but it’s easier said than done. To achieve the unity of knowing and doing, it is necessary to make a lot of decisions against humanity." Zhao Zhongzhe believes that in this process, ordinary users need tools and quantitative data to help them fight against human nature.
It is worth mentioning that ordinary people’s funds are often limited, which is difficult to compare with the social security fund. For ordinary people with limited funds, how to divide the proportion of asset allocation categories and how to do a good job in dynamic position management?
"Dynamic position management after large-scale proportional segmentation needs to consume more energy. If we don’t want to do it ourselves, we can use professional tools and systems." Zhao Zhongzhe said that all banks will have related service tools and systems. Although there will be subtle differences, the general logic is the same.
Zhao Zhongzhe took the TREE Profit Plan of China Merchants Bank as an example to dismantle the bank’s asset allocation solution. It is reported that the TREE Changying Plan is a one-stop asset allocation solution created by the wealth management team of China Merchants Bank and the Public Offering of Fund management organization. With FOF (a fund that invests in other investment funds, also known as funds in funds) as the carrier, we can achieve stable and good performance goals through multi-asset and multi-strategy allocation.
Specifically, first, the upper limit of risk assets is defined through clear gear design, which is divided into four grades: 15%/25%/40%/70%, which is similar to low/medium/high fixed income+and high weight FOF products; The second is to control the maximum withdrawal, annualized income and rolling winning rate of products by setting clear performance targets, and emphasize risk control and performance stability.
"The core of the Changying plan is to solve the problem that the category of funds is always fighting for relative rankings." Zhao Zhongzhe said that the relative ranking assessment mechanism of fund categories will lead some fund managers to operate too aggressively. These operations are suitable for the management of partial stock funds, but if they are applied to fixed income+funds, there will be some problems. Under the assessment of performance ranking, it is unrealistic to ask fund managers to make absolute returns. The core of the TREE long-term profit plan is to achieve the absolute return target with fund managers.
"Why do you say that buying a long-term profit plan can be lazy, because customers can hand over the operations of adding and reducing positions and controlling retracement to FOF fund managers?" Zhao Zhongzhe introduced that in this process, customers only need to combine the positions that suit them, which is much simpler than making dynamic position adjustment according to the market environment.
In addition to position management, there are still many investors who have doubts about the amount of investment, that is, whether it is necessary to do asset allocation with less money and how to do asset allocation with less money. In fact, in the field of asset allocation, the amount is never required. The key is that individuals should have a deep understanding of their asset allocation.
"Our funds are usually divided into two categories of accounts, namely, functional accounts and investment accounts. Functional accounts mainly do live money management and security management, while investment accounts mainly do enterprising investment and steady investment. " In Zhao Zhongzhe’s view, no matter how much money there is, we must first meet the needs of capital function. Simply put, we should have enough living money when we need money, and at the same time, we should have some funds to deal with risks, such as medical care and pension, in addition to medical insurance and social security, we should make some reasonable supplements through commercial insurance. On the premise that the functional requirements can be met, it is the core of asset allocation to use the remaining money for investment.
Zhao Zhongzhe further concluded that long-term money and short-term money cannot be mismatched, and long-term investment will involve the analysis of customers’ risk preferences, income expectations and macro environment. "All in all, as long as you have enough money, you can do asset allocation. This is a narrow sense of asset allocation, and it is also an investment. This matter needs to be realized by mastering some professional knowledge."
In Zhao Zhongzhe’s view, scientific asset allocation is not gambling. If you want to obtain higher expected returns, you often need to deal with higher fluctuations. In the case that the principal is small and earning more points has little impact on improving your life, it is recommended to pay more attention to the study of financial management knowledge and accumulate more experience. "The investment field places special emphasis on cognition. People who have experienced a complete bull-bear cycle and those who have not experienced it have completely different views on investment." Zhao Zhongzhe said that the promotion of investment and financial management cognition needs to go through the process of "experience cycle and gain cognition". Only when individuals have accumulated investment experience and then improve their investment cognition will they find that their views on the market will change, and there is no shortcut to this process.
(Disclaimer: The contents and data in this article are for reference only and do not constitute investment advice. Investors operate accordingly at their own risk. )
Cover Image Source: national business daily