Core Insights - The average return of pension FOFs has reached 4.47% over the past year, with over 185 products increasing by more than 5% [1][4] - Despite the positive performance, the scale of pension FOFs has been continuously shrinking, nearly halving from its peak [3][4] - A significant number of pension FOFs are facing "scale pain," with some products being forced to liquidate due to insufficient scale [3][4] Scale Decline - Since the establishment of the first pension FOF in September 2018, the scale initially expanded rapidly, surpassing 100 billion yuan in 2021, but has since declined [3] - As of the end of Q1 2025, the total scale of 270 pension target FOFs is 59.078 billion yuan, a year-on-year decrease of 13.13% [3] - The scale has dropped from 113.25 billion yuan at the end of 2021 to 59.958 billion yuan at the end of Q1 2025, indicating a significant contraction [3] Performance Metrics - The average return over the past three years for pension FOFs is -2.84%, with 16 products achieving returns over 5% [4] - The best-performing product in the past year is the Shenwan Hongyuan Pension Target Date 2045, with a return of 22.64% [4] - In the current year, the average return is -0.26%, with 30 products increasing by more than 2% [4] Y Share Challenges - The personal pension fund system has seen steady growth, with 288 funds listed as of Q1 2025, including 203 pension FOFs [5][6] - However, 178 Y share products have scales below 100 million yuan, indicating a lack of substantial investment [6] - Issues with redemption processes have been reported, highlighting operational inefficiencies within the system [6][7] Structural Issues - Pension FOFs generally have long lock-up periods and double charging, which limits their attractiveness to investors [8][9] - The double charging issue arises from the need to pay management fees at both the FOF and underlying fund levels, impacting overall performance [9] - Recommendations include introducing more diverse fund types and improving fee structures to enhance investor experience [9][10] Future Directions - The asset management industry is encouraged to leverage tax incentives and the long-term nature of pension funds to promote better investment practices [10] - There is a call for product innovation to meet ongoing retirement needs, including the introduction of low-volatility open-ended products [10] - Diversifying asset classes within pension FOFs, such as including gold and overseas assets, is suggested to improve risk-return profiles [10]