Product lineup expands further, individual pension funds exceed 310

◎ Reporter Zhu Yan

As the tax rebate window for individual pension products opens in 2025, many investors are truly feeling the policy benefits. Good news also comes from the market—over the past year, individual pension funds have not only performed well but also continued to expand their product lineup. Since 2026, new products have been added to the list of individual pension funds, with the total number surpassing 310. These products not only strengthen citizens’ retirement savings but also inject steady, long-term investment momentum into the capital market.

Expansion of Individual Pension Funds

In 2026, the number of individual pension funds continues to grow. Following the inclusion of the Guotai Zhongzheng A500 ETF Connection Y fund earlier this year, the Everbright Prudence Balanced Retirement Target Three-Year Holding Hybrid (FOF) Y, established on March 12, has also officially joined the list. As of March 20, the total number of domestic individual pension funds has exceeded 310.

“Companys are developing pension target FOFs to focus on building a comprehensive retirement finance strategy and participating in the construction of the third pillar of retirement security. By adding Y shares, they aim to create low-cost, highly adaptable long-term investment tools for individual pensions,” said a representative from Everbright Prudence Fund to Shanghai Securities Journal.

The representative believes that China’s individual pension system framework is basically complete, and supply-side improvements are ongoing. However, for future development, related services may need to further expand emergency withdrawal scenarios, increase product design diversity and flexibility, and improve risk-adjusted returns and user experience.

“Last year, I bought my first individual pension fund and recently tried the tax rebate. What’s more, the pension fund in my account has performed quite well over the past year,” said an investor.

Choice data shows that as of March 19, the average one-year return of individual pension funds exceeded 15%, with over 60 products achieving more than 20% during the same period. Leading performers include products like the China Merchants Bank ChiNext Board 50 Index Y, Tianhong CSI Innovation and Entrepreneurship 50 ETF Connection Y, and E Fund Retirement 2055 Year Holding Hybrid (FOF) Y.

Diversified Asset Allocation Boosts the Appeal of Pension FOFs

As market volatility increases, the value of diversified asset allocation becomes more evident. Many individual pension funds have shown relatively stable returns, which helps guide long-term capital holding. By the end of 2025, the scale of individual pension funds reached over 60 million yuan.

Zhang Yun, fund manager of Everbright Prudence Balanced Retirement Target Three-Year Holding Hybrid (FOF) Y, told Shanghai Securities Journal that diversified asset allocation is key to coping with market fluctuations. Under regulatory compliance and fund contract terms, public fund FOFs can achieve cross-category allocation across stocks, bonds, commodities, and global markets. As market volatility intensifies in 2026, diversifying assets and industry sectors, along with low-correlation varieties, can reduce overall portfolio volatility.

“The ongoing trend of multi-asset allocation also raises higher requirements for fund managers of individual pension FOFs, promoting industry transformation toward high-quality development. Managers need comprehensive multi-asset research capabilities, understanding the correlations between different assets, and implementing dynamic optimization and risk hedging. Additionally, multi-asset allocation encourages more refined and customized products, better meeting individual retirement needs,” said Bi Mengni, researcher at Geshang Fund, to Shanghai Securities Journal.

Pension Funds Support Long-term Investment

As typical long-term capital, individual pensions are becoming a significant force supporting the stable operation of the capital market.

Industry insiders believe that market demand has enormous potential. China’s multi-layered pension security system is continuously advancing, with gaps in the first and second pillars gradually emerging. Residents’ awareness of retirement savings is also increasing. FOFs, by offering products with different risk levels and reasonable holding periods, can accommodate investors of various ages and risk preferences. Especially, the target date and target risk designs of retirement goal FOFs align with the core needs of long-term, steady appreciation of individual pensions.

Bi Mengni explained: on one hand, individual pension FOFs, through diversified allocation, can smooth market fluctuations, reduce the impact of single-asset volatility on the portfolio, and strengthen confidence in long-term holdings; on the other hand, tax-advantaged policies for pensions, low fee designs for FOFs’ exclusive Y shares, and product holding period constraints further lower investment costs. These features help guide investors to establish long-term investment concepts and promote long-term capital accumulation.

“As the scale of individual pension funds continues to grow, they will inject stable incremental funds into the capital market, helping it achieve steady growth, and also provide long-term capital support for the real economy,” said Bi Mengni.

(Edited by Wen Jing)