Prudence is top priority for new investment fund

Despite the fact that the 1.53 trillion yuan ($245 billion) National Social Security Fund is allowed to invest in more areas, security and prudence remain the priority of the fund's investment strategy, a top finance official said on Friday.

Wang Bao'an, vice-minister of finance, made the comment when responding to questions over possible increasing risks associated with the expansion of investment. The State Council announced on Wednesday that it will allow the NSSF for the first time to invest in local government bonds, while also investing in more corporate bonds, centrally-administered enterprises, creditworthy private firms, trust loans and interbank certificates of deposit.

Wang clarified that contrary to public perceptions, the NSSF will not invest in massive bonds issued by local government financing vehicles, which are believed to carry higher risk. The fund will only invest in bonds directly issued by local governments.