Summary of the Key Points
This article, which analyzes the performance of the national social security fund for the year 2025, reveals a fact that goes against common sense: in an environment where everyone is struggling to make money and investment returns are declining, the social security fund, which manages the money intended for people’s retirement and emergency needs, achieved an impressive annual return of 13.22% in 2025. Its total assets reached 3.8 trillion yuan, with a long-term annualized return of 7.62%, ranking it third among the world’s largest pension funds, on par with the top pension funds in Norway and the United States. The article also details the fund’s strategy, which has transformed it from experiencing poor returns in the past two years to achieving remarkable success. Its investment approach can serve as a valuable reference for ordinary investors looking to manage their finances.
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Detailed and Easy-to-Understand Explanation
1. Just how impressive is the social security fund’s performance?
To put this in perspective, imagine a 300-pound person outrunning a sprint champion. Let’s do some math to understand the sheer difficulty of achieving such returns:
- In 2025, 60% of retail investors in the A-share market lost money; even when the market was rising, it was still a matter of luck for ordinary investors to make a profit.
- With a principal of 100,000 yuan, it’s not difficult to earn a 10% return if you hit a limit-up. However, the social security fund manages assets worth over 3.8 trillion yuan, more than half of the total holdings of all retail investors in the A-share market. With such a large amount of money, even a small investment could easily drive a stock’s price to a limit-up, making it extremely challenging to manage. Yet, achieving a 13% return is like having that 300-pound person outrun a top athlete like Su Bingtian.
- Compared to other financial products, the current three-year fixed deposit interest rate is less than 2.5%, and securing a 3% return on stable investments is already competitive. The social security fund’s long-term annualized return is more than twice that of typical financial products, making it a top performer in the global asset management industry.
2. The first step to the comeback: admitting ignorance and entrusting professional expertise
The social security fund made mistakes in the past. In 2022, it suffered losses, and its return rate in 2023 was less than 1%. After two consecutive years of poor performance, it didn’t insist on claiming it knew the most about investment. Instead, it changed its approach by significantly increasing the proportion of investments entrusted to professional institutions, such as public and private funds that are constantly active in the market. In 2021, only 66% of the fund’s assets were managed by external institutions; by 2025, this proportion had risen to 73%. This means that the fund relies on professionals to select stocks and make trades, focusing on setting overall investment strategies and ensuring these institutions don’t make mistakes. Only about 10% of retail investors have the patience and knowledge to do this; many become overconfident after just two years of trading and end up losing a lot of money. The social security fund’s willingness to admit its limitations in certain areas is a clear advantage.
3. The second step to the comeback: expanding beyond the A-share market
Another unconventional move was to increase overseas investments. In the past three years, the proportion of overseas investments has risen from 11% to 15% in 2025, with 580 billion yuan invested globally. The fund partnered with 37 of the world’s top asset management firms to oversee these investments. This strategy paid off as the global market, especially the tech sector, was booming in 2025. The NASDAQ in the U.S. rose by over 40%, and U.S. bonds offered high returns. By diversifying its investments, the fund avoided the poor performance of the A-share market and reaped the benefits of the global tech boom.
4. The social security fund’s approach to AI investments
AI is a hot topic in the market, with many retail investors rushing to buy AI-related stocks. However, the social security fund adopted a more cautious strategy. While it is optimistic about the long-term potential of AI, it didn’t follow the crowd. Instead of buying already expensive AI stocks, it invested in undervalued bank stocks and overlooked smaller, less well-known tech companies. This approach paid off as the AI market cooled down, while the bank sector continued to perform well. The fund’s thorough research on the impact of AI on employment and which industries it could truly benefit from helped it avoid losses and achieve better returns.
5. The social security fund’s approach is the right path for ordinary investors in a low-return era
Many people are anxious and try to make quick profits, often ending up losing more money. The social security fund’s strategy offers practical advice:
- Don’t overestimate your abilities; if you don’t have years of trading experience, trust professional institutions to manage your money.
- Don’t put all your money in one asset or invest solely in stocks or bonds. Diversify your portfolio to reduce risks.
- Don’t chase hot trends; instead, look for undervalued assets. By focusing on stable, long-term returns of 5%-10%, you’ll outperform 90% of investors.