Pilot Program for Long-Term Investment Reform of Insurance Funds: Analysis of Incremental Funds and Impact on Growth Sectors

Based on the latest data and policy information obtained, I provide the following comprehensive analysis:

The “Guiding Opinions on Supporting High-Quality Development of the Insurance Industry in Guangdong Province to Help Guangdong Take the Lead in Chinese-Style Modernization” issued by the Guangdong Financial Regulatory Bureau marks a new stage in the pilot program for long-term investment reform of insurance funds [1]. The core content of the policy includes:

• Promote insurance companies to set up private securities investment funds in Guangdong
  : This is an important innovative breakthrough in the investment model of insurance funds
• Clarify key investment directions
  : Hard technology fields such as integrated circuits, artificial intelligence, low-altitude economy, and biomedicine
• Regulatory rule adjustments
  : The National Financial Regulatory Administration lowered the risk factor for specific equity assets by up to 10% in December 2025, freeing up space for insurance funds to enter the market [1]

• Balance of insurance fund utilization
  : 36.12 trillion yuan
• Stock allocation scale
  : 3.62 trillion yuan
• Current equity investment ratio
  : 10%

According to brokerage calculations [1]:

• Zhongtai Securities Calculation
  : Static release of minimum capital of 32.6 billion yuan; if all are allocated to CSI 300 stocks, the corresponding incremental funds in the stock market will reach
  108.6 billion yuan
• Shenwan Hongyuan Calculation
  : Increase in stock investment scale of
  51.4 billion to 201.5 billion yuan

Short-term incremental funds

: 50 billion to 200 billion yuan

Currently, the equity investment ratio of China’s insurance funds is 10%, while that of mature international markets is usually between 15% and 20%. If it is gradually increased to 15%:

• Potential incremental funds
  : 36.12 trillion yuan × (15% -10%) =
  1.81 trillion yuan

If the Guangdong pilot is successful and promoted nationwide, assuming 5% of the balance of insurance fund utilization is allocated to private securities investment funds:

• Incremental private fund funds
  :36.12 trillion yuan ×5% =
  1.81 trillion yuan

Long-term incremental fund potential

:3.6 trillion to5.4 trillion yuan

###3. Evaluation of Capital Diversion Effect on Growth Sectors

####(1) Market Position of STAR Market and ChiNext Board [1]

• ChiNext Index
  : Surged 49.6% in 2025, far exceeding the main board index
• STAR Market Market Capitalization
  : Steadily growing under the agglomeration effect of hard technology enterprises
• Rise of Beijing Stock Exchange
  : Completed 38 IPOs in2025, an increase of over50% compared to2024, with172 enterprises under review

####(2) Current Investment Status of Insurance Funds in Growth Sectors

[1]

• STAR Market stock holdings (>2 years)
  : Only0.6% of the total, far lower than the 13% of CSI300 constituent stocks
• Overall allocation to growth sectors
  : Still has huge room for improvement

Insurance funds are clearly guided to invest in:

• Integrated circuits
  : Independent and controllable semiconductor industry chain
• Artificial intelligence
  : Core engine of digital economy
• Biomedicine
  : Innovative drugs and high-end medical devices
• Low-altitude economy
  : Emerging strategic industry

The overlap between these fields and the STAR Market/ChiNext Board is over80%.

####(3) Calculation of Capital Diversion Effect

Assuming20%-30% of the new funds are invested in the STAR Market and ChiNext Board:

• Low scenario
  :51.4 billion yuan ×20% =
  10.3 billion yuan
• High scenario
  :201.5 billion yuan ×30% =
  60.4 billion yuan

Short-term incremental funds for growth sectors

:10 billion to 60 billion yuan

Assuming25% of the long-term incremental funds (3.6 trillion to5.4 trillion yuan) are invested in growth sectors:

• Long-term potential increment
  :900 billion to1.35 trillion yuan

Long-term potential increment for growth sectors

: Approximately 1 trillion yuan

####(4) Qualitative Evaluation of Capital Diversion Effect

• Optimize investor structure
  : As long-term institutional investors, insurance funds help stabilize fluctuations in growth sectors
• Improve valuation rationality
  : The long-term value-based investment philosophy helps discover the true value of hard technology enterprises
• Enhance market resilience
  : Long-term capital accumulation reduces speculative transactions and improves market stability

• Sector volatility risk
  : Growth sectors are inherently volatile; insurance funds need to establish effective risk control mechanisms
• Liquidity risk
  : Some stocks on the STAR Market and ChiNext Board have insufficient liquidity; large capital inflows/outflows may face impact costs
• Valuation bubble risk
  : Short-term over-pursuit may occur under policy guidance

###4. Investment Recommendations and Strategy Outlook

####(1) Recommendations for Insurance Funds

1. Diversified allocation strategy
   : Avoid over-concentration in a single sub-track
2. Long-term holding strategy
   : Make full use of preferential risk factors for holdings over 2 or3 years
3. Active management strategy
   : Invest through professional private securities investment funds

####(2) Recommendations for Investors

1. Focus on policy-oriented fields
   : Integrated circuits, artificial intelligence, biomedicine, etc.
2. Track insurance fund trends
   : Insurance fund heavyweight stocks may become long-term value benchmarks
3. Seize Beijing Stock Exchange opportunities
   : The Beijing Stock Exchange is becoming a new financing hub for “specialized, sophisticated, unique, and new” enterprises

###5. Conclusion

:

• Short-term (2026)
  :50 billion to200 billion yuan
• Long-term
  :3.6 trillion to5.4 trillion yuan

:

• Short-term
  :10 billion to60 billion yuan
• Long-term
  : Approximately1 trillion yuan

: The pilot program for long-term investment reform of insurance funds will bring significant long-term capital support to the A-share market, especially growth sectors, helping to optimize the market investor structure and enhance market stability and resilience. However, attention should be paid to short-term volatility risks and liquidity risk management.

[1] Jinling API Data - Market Data, Financial Analysis, Technical Analysis, Python Calculation Results
[2] Yahoo Finance - “Reduction of Risk Factor for Domestic Insurance Stock Holdings Drives Hundreds of Billions of Funds” (https://hk.finance.yahoo.com/news/內險持股風險因子降-帶動千億資金-183800402.html)
[3] Yahoo Finance - “Hang Seng Index Rises 28%, Strongest in 8 Years; Targets 30,000 in2026” (https://hk.finance.yahoo.com/news/恒指漢28-八年最勁-2026衝三萬-182700906.html)
[4] Yahoo Finance - “Hong Kong on the Sidelines? Beijing Stock Exchange to Become China’s New IPO Hub” (https://hk.finance.yahoo.com/news/香港靠邊站-北交所將成為中國ipo新樞紐-034306452.html)
[5] Bloomberg - Analysis on the A-Share Investment Ratio of Insurance Funds (https://www.bloomberg.com)