Recently, the China Institute of Financial Research of Shanghai Jiao Tong University and the Ant Group Research Institute jointly released the "2023 Survey Report on Residents' Investment and Financial Management Behavior". According to the report, the proportion of residents who use long-term financial management as a supplementary pension is increasing year by year, from 10% in 2021 to 45% this year, but in fact, the penetration rate of personal pension products is still low, with 62% of respondents not opening personal pension accounts and 76% not buying personal pension products.
Although pension has become the main goal of residents' long-term financial planning, the public's understanding of pension products is still limited, and the popularity of personal pension products still needs to be improved. In the last issue of "Pre-investment Q&A", the significance of opening a personal pension account was explained, and this issue of "In-investment Q&A" continues to answer the question of how to choose investment products
Q1. Why should personal pensions be locked in for a long time?
According to the report, in 2023, the proportion of users who are willing to hold within one year will increase to 67%. However, only 8% of users are willing to hold for more than five years, which shows that the proportion of residents who are willing to invest for a long time is still less than one-tenth. At present, China's personal pension account is closed operation, and the account funds cannot be transferred out and received at will before the conditions are met. This long-term lock-in feature is precisely to prevent the pension plan from being disrupted by unexpected situations such as "advanced consumption" and "excessive consumption". Therefore, when buying pension FOF products, investors will find that all products have a holding period, ranging from one year to five years. The holding period is mainly set to smooth investment volatility and reduce risk through time. Generally speaking, the higher the proportion of equity assets, the longer the holding period. For ** managers, the longer the holding period, the more time they can spend managing their portfolios, improving the capital utilization of the product, and mining longer-term value. For investors, the holding period is not free to sell or redeem**, which makes them more focused on long-term returns rather than short-term market volatility. This is necessary for investors to plan their finances and develop long-term investment habits.
Advantage 1: The monthly investment can be less, and the impact on the current life is less.
For example, without considering the rate of return, if you want to accumulate a principal of 60,000 yuan, you need to deposit 5,000 yuan per month if you plan to save it in 1 yearIf you plan to save up to 10 years, you only need to deposit $500 per month. Under the premise of a certain investment goal, the investment range should be extended as much as possible, and the less investment you need each month, the less impact it will have on your current life.
Advantage 2: Use the "compound interest effect" of time to make small assets snowball.
In layman's terms, the compound interest effect is to continuously invest the money earned before to generate new income, and in this process, the longer the time, the greater the exponential effect of wealth being amplified. For example, if you invest 10,000 yuan and compound interest of 3% per year, your assets will grow to 1 after 10 years340,000, and in 30 years it will grow to 2430,000. The compounding effect is subtle and subtle at first, but when it accumulates over time, it can have a surprising effect.
Advantage 3: It is easier to overcome the emotional impact and avoid chasing the rise and kill the fall.
From the perspective of the capital market cycle of ten years or more, the long-term trend is upward, but in the short term, the volatility is relatively large. Based on this, adhering to long-termism is the only magic weapon for successful investment. For personal pension investment, adhering to the long-term concept will help to avoid the impact of short-term fluctuations as much as possible and avoid irrational behaviors such as "chasing up and down".
Q2: What should I do if I have a need for expenses in the near future and cannot withdraw the money?
A personal pension is not an account set up for short-term expenditure needs, but "specially designed for retirement". The core reason for the recent shortage of daily expenses, or other large expenditure needs that cannot be met, is not whether to open a personal pension account, but that investors have not done a more comprehensive asset allocation. By categorizing funds according to their importance and urgency, and making more comprehensive preparations, we will be able to cope with all kinds of different expenses as much as possible, and the big ship of "family assets" will be more stable.
Specifically, how to do a good job in asset allocation?Standard & Poor's Household Asset Allocation Theory proposes to prepare four household accounts, which can be used as a reference to a certain extent: Daily expense accounts, including rent, living expenses, travel and other expenses, account for about 10%. The family security account, which is ready for investment for medical treatment or other accidents, is earmarked, accounting for about 20%. The asset appreciation account is committed to creating high returns with risky investments, accounting for about 30%. Stable income accounts, that is, money that preserves capital and appreciates, and investments in pension and children's education belong to this category, accounting for about 40%.
Q3. How to choose the product of personal pension account?
Pension investment should not only pay attention to the safety of investment, but also pay attention to profitability. According to the regulations, the funds in the personal pension fund account can be used to purchase financial products such as bank wealth management, savings deposits, commercial pension insurance, and public offerings. According to the statistics of the national social insurance public service platform, as of November 12, there were a total of 741 personal pension products, including 465 savings products, 162 insurance products and 19 wealth management products.
Pension funds are long-term funds, and equity investment has certain advantages in providing long-term compound income. Compared with these four types of products, the public offering ** has accumulated many years of professional experience in equity investment, and has outstanding equity asset allocation capabilities, especially for young people, who are far away from the retirement date and have high risk tolerance, so they can consider allocating high-risk equity assets to improve long-term returns. In addition, the public offering ** also has many advantages such as openness and transparency, flexible investment, strict risk control, low rates, etc., if there is a higher expectation of long-term pension investment returns, you can pay more attention to personal pensions**.
Q4, after opening a personal pension account and paying fees, how to buy a public offering?
Specifically, there are two ways: first, if the bank where the fund account is opened belongs to the personal pension sales agency, the participant can directly open a personal pension special trading account in the bank to invest in personal pension products. Second, participants can also enter the personal pension area through the official website or mobile client of the personal pension product manager and non-bank sales agency, open a special trading account for personal pension, and bind the personal pension fund account as a settlement account to carry out investment in personal pension products.
On November 28, 2022, the first batch of pension target **y shares went on sale. In the past year, the personal pension has begun to take shape, providing investors with different investment strategies and different risk-return characteristics of pension investment products. According to wind data, as of November 28, 2023, the number of pension target ** products with Y share has reached 174;As of the end of the third quarter, the total size of Y share reached 518.7 billion yuan.
The long-term performance of the pension company is closely related to the overall strength of the company, and investors need to focus on the company's investment and research strength, management experience, and long-term performance when choosing. As a pioneer in the public offering industry, ICBC Credit Suisse has always attached great importance to the entrustment responsibility of the people's "pension money", and will continue to polish its investment and research capabilities, product layout, and investor accompaniment, and strive to better serve the people's needs for a better pension.
Risk Warning: **The word "pension" in the name does not represent income protection or any other form of income commitment, ** does not protect the principal, and losses may occur. The manager manages and uses the property in accordance with the principles of due diligence, honesty and trustworthiness, prudence and diligence, but does not guarantee a certain profit, nor does it guarantee a minimum return. Past performance is not indicative of future performance, and other performance managed by the Manager does not constitute a guarantee of performance. **There are risks, investors should carefully read the "** Contract", "Prospectus", "Product Key Facts Statement" and updates and other legal documents before investing, and choose investment varieties suitable for their own risk tolerance on the basis of a comprehensive understanding of the product situation, rate structure, charging standards of each sales channel and listening to the suitability opinions of the sales agency, and invest cautiously.