The Analysis Of Investment Operations Of Social Security Fund In China

As social security system reform in China, social security fund-raising mode from the current pay-as to the part of the accumulated changes in the system, the fund have been expanding. Their operations in the capital market investments are also growing increasingly diverse. However, the aging population growing in China, the fund embezzlement scandal emerging, which make social security fund's ability to pay to face serious challenges. At the same time with the regulations of laws and imperfections in financial market development, the Fund's current investment rate of return is low, this series of problems have affected the lives of the residents and social stability. Therefore, increasing the value of social security funds must be solved in the development process of economy.In this paper, we take the National Social Security Fund for example, select the Awkwardness of 10 votes which hold by the fund in the stock market as an investment portfolio, analyze the situation of the operation and investment from 2008 to 2009, using Markowitz assets portfolio theory, capital asset pricing model and VaR to calculate the risk of the portfolio, and compare with the market level of risk which is represented by the Shanghai Composite Index. Studies have shown that the social security fund investment risk is greater than the market average, which need to be adjusted to reduce the risk of investment strategies. As the social security fund emphasis on safety, therefore, this article proceeds at the mean-variance model which objective is the minimum risk for a certain level of earnings rate, in order to optimize the investment model. Finally, based on the research of the paper, we mention several policy recommendations for the Social Security Fund's investment operations with a view to enhance operational efficiency, and ensure investment returns and security.