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Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

On December 5, the major A-share indices collectively weakened, with the Shanghai Composite Index falling below the 3,000-point mark again after a month and a half. At this juncture, on December 6, the Ministry of Finance issued a letter to solicit opinions from the public on the "Measures for the Administration of Domestic Investment of the National Social Security Fund (Draft for Comments)", which quickly aroused widespread concern in the market.

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

Image source: official website of the Ministry of Finance.

This draft involves the adjustment of the investment scope of social security funds and the proportion of investment supervision, among which the optimization of the investment part of the equity market has been placed on the expectation of "increasing the weight of A-shares" by the market.

According to the annual report data of the social security fund, as of the end of 2022, the overall scale of the social security fund is about 2.88 trillion yuan, with an average annual investment return of 7.66% since its establishment in August 2000, and a cumulative investment income of about 1.66 trillion yuan.

The investment management of the social security fund brings together elites from all walks of life and has made a lot of gains in the past. And on such a large base, a slight adjustment of the investment ratio can leverage huge funds.

So what is the current investment situation of the social security fund in A-shares? Which companies do you prefer? Which "bull stocks" have you invested in this year? After this round of adjustment, what changes may there be in the equity market investment of the social security fund?

How much room is there for the social security fund to enter the market through ETFs?

Among the relevant provisions on equity investment in social security funds in the draft for comments, there are two places that are of most concern to the market.

The first is the scope of direct investment in social security funds, which for the first time clarifies that stock index investment and ETF (exchange-traded index fund) investment can be carried out after approval.

Since the beginning of this year, ETFs have become popular, with a net inflow of more than 400 billion funds into this track, before the "national team" Huijin Company shot "the market" has also been achieved by increasing its holdings of ETFs, this time clarifying the ETF investment of the social security fund, so that the market has more expectations for social security funds to enter the market through ETFs and other index investments.

In fact, although the relevant regulations on social security fund investment in ETFs have not yet been clarified, a number of social security fund portfolios have tested the waters to invest in ETFs, including "National Social Security Fund 001 Portfolio", "National Social Security Fund 002 Portfolio", "National Social Security Fund 407 Portfolio" and "National Social Security Fund 402 Portfolio", which have appeared in the top 10 holders of many EFT industries in the third quarter of this year. The ETFs held include a number of CSI 300 ETFs, as well as CSI 500 ETF and SZSE 100 ETF.

The second is about the maximum investment ratio of the social security fund, in the draft for comments, the maximum investment ratio of the social security fund in stocks and equity assets can reach 40% and 30% respectively.

Prior to this, the social security fund was stipulated that "the proportion of investment in securities investment funds and stock investment shall not be higher than 40%". In other words, the maximum investment percentage for equity-like investments has changed from "no more than 40%" to "up to 40%".

It seems that there are only slight differences, but the specific situation has to be combined with the current stock investment situation of the social security fund.

In the A-share market, the trend of social security funds has always attracted much attention from the market. According to Choice statistics, as of the end of the third quarter of 2023, a total of 67 portfolios of the social security fund appeared in the list of the top ten shareholders of 643 listed companies (deduplicated), with a total market value of 415.075 billion yuan, which is still far from the upper limit of 40% investment ratio.

Judging from the "heavy stocks" of the social security fund alone, the space for the social security fund to enter the market may not be small. So which industries and individual stocks do the social security funds prefer, and which of the stocks held by the social security fund have risen better this year?

The investment preference of the social security fund has been doubled this year!

From the perspective of the industry distribution of the social security fund's holdings, the majority of its holdings are still concentrated in bank stocks and other non-bank financial industry stocks.

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

This has a lot to do with the position of the National Social Security Fund Council, which holds shares of Agricultural Bank of China, Industrial and Commercial Bank of China, Bank of Communications and Chinese People's Insurance with a market value of more than 10 billion yuan, and these shares basically come from the transfer of shares held by the Ministry of Finance in recent years.

From the perspective of the number of shares held, the pharmaceutical biology and machinery and equipment industry sector is the two major sectors of the high-frequency layout of the social security fund, in the case of no duplication, the two major industries have more than 70 stocks held by the social security fund "heavy position", and the total market value of the position is also more than 10 billion yuan.

The social security fund has intensively deployed the pharmaceutical biology and machinery and equipment sectors, and the overall performance of the individual stocks held is also considerable, not only in November, the average increase since this year has closed positive, and many stocks have risen sharply in November.

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

According to the author's statistics, there were 15 heavy stocks of the social security fund that rose by more than 20% in November, of which 5 came from the pharmaceutical and biological sector and 2 came from the machinery and equipment sector (Olaide, Shenzhen Keda). Among them, Olaide and Shenzhen Keda both belong to the "Huawei concept stocks".

Extending the time, the top 10 stocks held by the social security fund this year are as follows, of which there are 9 "doubled" stocks, and many stocks have benefited from the popularity of ChatGPT and artificial intelligence concepts this year.

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

It is worth noting that due to the huge size of the social security fund, managed by a small number of people or institutions, there are certain difficulties and risks, and we can also see from the prefix of the social security fund portfolio that some asset management leaders represented by the head fund company have participated in the investment management of the social security fund, which to a certain extent has also caused the difference in the stock selection layout of different social security fund portfolios.

Among the more than 600 stocks held by the social security fund, there are still 24 stocks that are favored by multiple social security fund portfolio managers at the same time, and are held by 3 or more social security fund portfolios. The author has compiled a list of individual stocks jointly held by various social security fund portfolios as follows.

Holding more than 400 billion shares, the social security fund has captured 9 doubling shares!

Risk disclosure: The content involved in this article does not guarantee the completeness and accuracy of the data, and the analysis conclusions are for reference only, and the varieties involved do not constitute actual investment operation advice. The stock market is risky, and investors need to be cautious.

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