Continue to steadily increase the proportion of equity allocation and optimize the fixed income fundamentals

Securities Times reporter Yang Qingwan

In a low-interest-rate environment, sizable insurance funds have actively entered the market, and last year they reaped considerable investment returns. Taking China Ping An (601318) as an example, the company proactively increased its allocation to equity investments. In 2025, its overall investment return rate reached 6.3%, up 0.5 percentage points year over year; in addition, more than 90 billion yuan worth of OCI (other comprehensive income) stocks are showing unrealized gains that are included in net assets, but have not been reflected in net profit.

With recent volatility in the capital markets intensifying, while increasing the proportion of equity asset allocation, how should investment strategies be optimized and adjusted? Do dividend-style assets such as those in banking, insurance, power, and public utilities still have allocation value? For the fixed-income investment “mainstay” that accounts for about 70% of total assets, how should duration and returns be balanced?

With these questions in mind, Securities Times reporter conducted an exclusive interview with Lu Haoyang, Deputy Chief Investment Officer of China Ping An (601318). Lu Haoyang said that near-term market volatility will not change the long-term trend. In the future, while optimizing the fixed-income “mainstay,” China Ping An will continue to steadily increase its equity allocation ratio, adopting a barbell-style structure to position high-dividend, steady and resilient stocks and growth stocks in the new quality productive forces area.

Short-term volatility won’t change the long-term trend

Data show that at the end of 2025, China Ping An’s investment balance in stocks and equity funds totaled 1.24 trillion yuan, accounting for 19.2% of investment assets—up 9.3 percentage points from 2024.

When speaking with Securities Times reporter, Lu Haoyang said that in an environment of long-term low interest rates and insufficient high-quality assets, increasing allocation to equity assets is a necessary path for insurance funds to achieve asset-liability duration matching and alleviate pressure from the yield spread.

“Short-term market volatility won’t change the long-term trend. We will continue to steadily increase the equity allocation ratio.” Lu Haoyang said that the capital market is in an important stage of deepening reforms and development. Strategic efforts such as economic structure transformation and upgrading, and cultivating new quality productive forces, are being carried forward continuously—laying a solid foundation for the stock market’s long-term positive outlook.

He also mentioned three key structural directions to focus on: first, hard technology and high-end manufacturing, including areas such as artificial intelligence, semiconductors, and machinery and equipment; second, fields related to green low-carbon and energy security, including traditional energy, new energy, and power equipment; third, the consumption upgrading and people’s livelihood services sectors, with a new layout in the service-consumption area. In the future, the company will follow the main planning line, dynamically evaluate the pace of policy implementation and industry realization, prudently identify high-quality assets with technological barriers and potential growth space, and balance returns and risks.

“Last year the capital market performed well, but when you look at each quarter specifically, market investment styles and theme preferences are different, which really tests the fund’s allocation and execution capabilities.” Lu Haoyang said.

“Insurance stocks are still undervalued for now”

High-dividend, steady and resilient stocks + growth stocks in the new quality productive forces direction is the barbell-style allocation strategy that insurance funds such as China Ping An have consistently adopted. However, with increased crowding in dividend-style asset trading, dividend yields will correspondingly shrink. In actual investing, how should the value of these assets be viewed?

In response, Lu Haoyang said that China Ping An allocated dividend-style assets relatively early—about ten years ago it treated them as a “stabilizer” to help it ride through cycles. At that time, the price-to-book ratio (PB) of bank stocks was at a relatively low level. He explained that, on the one hand, the company allocates to traditional high-dividend stocks such as banks and insurance, with very low acquisition costs; on the other hand, it also looks for targets that combine growth characteristics with high-dividend features—i.e., companies whose profits can continue to grow while maintaining a stable dividend payout ratio. Going forward, the company will increase its allocation to such targets.

Lu Haoyang also said: “From a long-term perspective, individual stocks in the insurance industry are still undervalued.” China Ping An has taken equity stakes in multiple peer insurance companies. On the one hand, the insurance industry will still have strong growth potential in the future. Under the strategy of building a strong financial country, efforts to enhance the quality and efficiency of the financial sector are being prioritized, and insurance is also one of the financially favorable sectors under policy support. On the other hand, changes in our country’s population structure, consumer habits, and investment attitudes will benefit the development of the insurance industry.

In terms of allocation ratio, more than half of China Ping An’s equity assets are high-dividend assets; the rest is mainly allocated to growth stocks related to new quality productive forces, including sectors such as technology, high-end manufacturing, and resource-related areas.

Lu Haoyang revealed that China Ping An’s overall investment strategy is to balance the “fixed income as the foundation, equities to enhance returns”: on the one hand, it adheres to the fixed-income mainstay as a “stabilizer” allocation, increasing its holdings of long-duration government bond-type instruments and high-quality credit bonds to match liability characteristics and mitigate reinvestment pressure; on the other hand, under the premise of controllable risk, it steadily increases equity asset allocation and adopts a barbell-style structural strategy—one end is high-dividend, high-quality steady and resilient stocks, and the other end is growth stocks in the new quality productive forces direction.

Optimize fixed-income strategies

China has entered a low-interest-rate era, and insurance funds have moved away from the past practice of heavily allocating to bond-type assets. Taking China Ping An as an example, at the end of 2025, the proportion of fixed-income assets and debt-type financial assets it allocated to was about 70%, down noticeably from around 80% at the peak.

Among them, the outstanding balance of bond investments was 3.57 trillion yuan, accounting for 55% of the total investment assets, down 6.7 percentage points year over year. Meanwhile, at the end of 2025, the scale of China Ping An’s insurance funds investment portfolio reached 6.49 trillion yuan, up 13.2% from the beginning of the year.

Regarding optimization of fixed-income investment strategy, Lu Haoyang told Securities Times reporter that, on the one hand, it upholds the principle of asset-liability duration matching and reasonably allocates to long-duration government bonds to manage duration gaps and respond to possible changes in interest rates in the future; on the other hand, it strengthens capabilities for bond trading and appropriately participates in products such as “fixed income +” to improve the yield level of fixed-income assets.

(Editor: Dong Pingping)

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