China’s first-ever target-date retirement funds will be available through Ant Financial’s wealth-management service, Ant Fortune, as the country expands savings options available to consumers beyond the national pension system.
Target-date retirement funds allocate a pool of investments to varying degrees of risk based on when an investor is expected to retire and cash out, such as 2030 or 2055. They were previously unavailable to Chinese consumers until the China Securities Regulatory Commission approved the first batch of 14 funds on Monday.
Those 14 funds will be sold by established Chinese asset managers, including China AMC, Bosera Funds, GF Funds Management and foreign joint venture ICBC Credit Suisse Asset Management. After finalizing initial preparations, which include setting the target dates and preparing investor-education plans for regulatory approval, consumers will be able to subscribe to the funds.
“Ant Fortune is dedicated to advocating healthy investment habits and providing access to a diverse range of financial products and investor education initiatives,” said Guoming Zu, vice president of Ant Financial’s Wealth Management Business Group. “Target-date funds are specifically designed to encourage individuals to save for retirement and plan for the long term.”
China offers three paths through which consumers can save for life after work, including the national pension system, voluntary occupational pensions, in the form of annuities, and private savings. Target-date retirement funds fall into the third category.
For consumers, Ant Fortune offers access to sophisticated investments via their mobile phones. The service uses consumer analytics to recommend the best funds for each user, which are calculated according to previous investments made through the platform and a survey filled out at sign-up, as mandated by Chinese regulators. A consumer who buys a mutual fund from a bank would be required to fill out the same survey.
The asset managers, meanwhile, have access to the same analytics to better target and reach potential consumers. Ant Fortune also provides AI-based services, such as automated designing of the e-brochures and other materials, which previously had been outsourced to third-party agencies and carried with them long turnaround times.
Some of the companies offering target-date retirement funds, including China AMC, Bosera Funds, GF Funds Management and ICBC Credit Suisse Asset Management, operate accounts on Ant Fortune’s dedicated platform for wealth-management services, Caifuhao. Caifuhao supports these companies with AI-powered services, such as smart marketing and content-generation and compliance and risk management.
Ant Financial said the services have resulted in overall improvements in operations, a reduction of costs and greater engagement by users with fund managers on the platform.
Since Ant Fortune first launched in 2015, all of China’s 116 mutual-fund asset-management companies have signed up to join the platform. There are now more than 4,000 wealth-management products available to the platform’s 180 million users.