Ping An’s chief investment officer (CIO), Benjamin Deng, outlined the company’s strategy at the Asian Investor’s Asian Investment Summit in Hong Kong.
He emphasised a balanced “double barbell” asset allocation to maintain stable returns amidst China’s steady macroeconomic and capital market development this year.
With Ping An’s insurance fund investment portfolio reaching RMB4.93 trillion by March 2024, Deng stressed the company’s commitment to a balanced and prudent approach to long-term strategic asset allocation.
“Asset allocation strategy requires patience to maintain a balanced and prudent approach across different macroeconomic cycles. The ‘double barbell’ allocation structure can ensure a very stable investment allocation and has given us quite good returns this year,” he said.
Over the past decade, Ping An has achieved an average comprehensive investment yield of 5.4%, surpassing its embedded value long-run investment return assumption.
Deng explained that the “double barbell” allocation strategy involves investing in long-duration interest rate bonds, such as government and local government bonds, alongside risk assets like equities, real estate, and private equity funds.
Within risk assets, there exists a “small barbell” approach, comprising growth stocks and stable stocks with high dividends, primarily state-owned enterprises (SOEs) across various sectors.
In addition to maintaining this allocation strategy, Deng sees potential in sustainable investment opportunities brought about by China’s energy transition.
According to the China Green Finance Committee (GFC), the demand for green and low-carbon investments in China is expected to reach RMB487 trillion over the next three decades.
Deng highlighted investment opportunities in renewable energy and electric vehicles (EVs).
“Sales and market penetration of EVs are growing at a rapid pace,” he said. “And the trend is set to continue steadily, making it attractive to invest in EV-related infrastructure such as charging stations.”
Looking ahead, he expressed confidence in China’s long-term economic stability and growth, expecting GDP growth to be around 5% this year. He encouraged cooperation with foreign investors willing to allocate funds to the Chinese market.
“Under China’s carbon neutrality target, local expertise is crucial for identifying long-term investment opportunities. Foreign investors engaged in this field can consider partnering with local experts like Ping An,” he said. “We are willing to provide the professional knowledge and support them to explore investment opportunities related to China’s carbon neutrality together.”
Ping An recently sold around 0.4% of its shares in HSBC Holdings Plc after it voted against the reappointment of departing chief executive officer Noel Quinn as a director.
