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What are the asset allocation preferences of 30 trillion insurance funds in the second half of the year? What are their views on the bond market and the A-share market? The results of the "Investor Confidence Survey of the Insurance Asset Management Industry" (hereinafter referred to as the "Survey") recently released by the China Insurance Asset Management Association in the second half of the year provide the answers.

According to this authoritative survey involving 36 insurance asset management institutions (hereinafter referred to as "insurance asset management") and 80 insurance companies, the most preferred asset for insurance funds in the second half of 2024 is bonds. As for the trend of the A-share market in the second half of the year, most insurance institutions participating in the survey hold a cautious and neutral attitude.

The survey results show that bonds are the preferred investment assets for my country's insurance institutions in the second half of the year, followed by stocks and bank deposits. Regarding the choice of asset allocation preferences in the second half of the year, 54.43% of insurance companies and 50% of insurance asset management companies chose bonds; bank deposits were chosen by 20.25% of insurance companies and 13.89% of insurance asset management companies, ranking second; stocks ranked third, with insurance companies and insurance asset management companies accounting for about 8% each.

The survey results show that most insurance institutions expect the allocation ratio of various types of assets in the second half of the year to remain basically the same as at the beginning of the year, and there is a possibility of moderately increasing bond and stock investments.

Regarding the trend of the bond market in the second half of the year, 50% of insurance asset management companies and 45.57% of insurance companies in this survey held a neutral view on the bond market in the second half of 2024. Another 41.67% of insurance asset management companies and 45.57% of insurance companies held a relatively optimistic view, which was close to the proportion of those holding a neutral view.

Most insurance institutions expect that the risk-free rate will fluctuate in the second half of the year, and the yields of medium and high-grade credit bonds will fluctuate downward or fluctuate in a narrow range.

The duration of insurance liabilities determines its preference for long-term assets. Therefore, in the bond market, insurance funds have always had a "special liking" for long-term bonds. The survey results show that in the second half of the year, insurance funds are optimistic about ultra-long-term interest-bearing bonds, medium- and long-term interest-bearing bonds, bank perpetual bonds, and credit bonds with a term of more than 10 years. Insurance institutions believe that economic fundamentals and monetary policy will be the main factors affecting the bond market in the second half of the year.

As for the A-share market, most insurance asset management companies (69.44%) and insurance companies (59.49%) hold a neutral view on the performance of the A-share market in the second half of this year, and expect the Shanghai Composite Index to remain between 2,800 and 3,300 points. Insurance asset management companies and insurance companies that hold a more optimistic view account for 22.22% and 24.05% respectively.

From the perspective of trend expectations, 41.67% of insurance asset management companies and 30.38% of insurance companies expect that the A-share market will fluctuate within a narrow range in the second half of 2024. More than 20% of insurance institutions expect that the A-share market will fluctuate upward or fluctuate widely in the second half of 2024.

The survey results show that among all A-share markets, insurance institutions are more optimistic about CSI 300-related stocks in the second half of the year, accounting for nearly 90%. In terms of sectors, insurance funds focus on public utilities, electronics, non-ferrous metals, banks, petroleum and petrochemicals, communications and coal. Insurance institutions participating in the survey believe that consumption, real estate recovery and corporate profit growth are the main factors affecting the A-share market in the second half of the year.

The survey also involved the views of insurance institutions on the 2024 yield target. The survey results show that 30.56% of insurance asset management companies expect the 2024 financial yield target to be concentrated in the range of 4.0% to 4.5% (including 4.5%), and another 22.22% of insurance asset management companies expect the target to be concentrated in the range of 3.5% to 4.0% (including 4.0%). The most concentrated choice of insurance companies for the full-year financial yield target is in the range of 3.5% to 4.0% (including 4.0%), with 25.32% of insurance companies choosing this option, but the overall situation is still relatively scattered. As for the comprehensive yield target, 25% of insurance asset management companies and 21.52% of insurance companies expect their targets to be concentrated in the range of 4.0% to 4.5% (including 4.5%).

Editor on duty: Qisan