Medium - and long-term funds are the "ballast" and "stabilizer" for maintaining the stable and healthy operation of the market. At the beginning of this year, the Central Financial Office and six other departments jointly issued the "Implementation Plan for Promoting the Entry of Medium - and Long Term Funds into the Market" (hereinafter referred to as the "Implementation Plan"), which made a series of institutional arrangements in the areas of long-term investment assessment system, investment policies, market ecology construction, etc., focusing on the bottlenecks and obstacles of medium - and long-term fund entry into the market. Dong Zhongyun, Chief Economist of AVIC Securities, told reporters that the "Implementation Plan" aims to promote the continuous entry of medium and long-term funds such as commercial insurance funds, national social security funds, basic pension insurance funds, and public funds into the A-share market through systematic institutional design and fund guidance, and enhance the inherent stability of the market. Since the implementation of the policy, the speed and scale of medium and long-term capital entering the market have significantly increased, injecting fresh blood of long-term stability into the capital market. The market ecology of "long money, long investment" is gradually maturing. The gradual formation of the "long money, long investment" investment style in the capital market has been promoted by the "Implementation Plan" from three aspects. Firstly, we will focus on guiding commercial insurance funds, national social security funds, basic pension insurance funds, enterprise (occupational) annuity funds, public funds and other medium - and long-term funds to further increase their market entry efforts, and clarify specific arrangements for steadily increasing the scale and proportion of medium - and long-term fund investments in A-shares. From the perspective of policy effectiveness, the pilot program for long-term stock investment of insurance funds is accelerating its implementation. In January and March of this year, the State Administration of Financial Supervision and Administration approved the second batch of pilot projects for long-term investment of insurance funds, with a total scale of 112 billion yuan. In May, the State Administration of Financial Supervision and Administration approved the third batch of pilot reforms for long-term investment of insurance funds. With the implementation of the third batch of pilot projects worth 60 billion yuan, the total scale of long-term investment reform pilot projects for insurance funds will reach 222 billion yuan. Secondly, the Implementation Plan emphasizes the establishment of a long-term assessment mechanism for more than three years. Regarding this, Chen Li, Chief Economist of Chuancai Securities, stated in an interview with Securities Daily that extending the investment cycle and optimizing the long-term assessment mechanism can help dilute short-term market fluctuations and strengthen long-term investment logic. Since the issuance of the Implementation Plan, the long-term investment reform of public funds has been steadily advancing. On May 7th, the China Securities Regulatory Commission issued the "Action Plan for Promoting High Quality Development of Public Funds", proposing to "comprehensively implement a long-term assessment mechanism for fund investment returns, with a weight of no less than 80% for medium and long-term returns over three years". At the same time, the long-term assessment mechanism of more than three years has also been extended to long-term funds such as enterprise annuities. On June 13th, the Ministry of Human Resources and Social Security disclosed the "Summary of National Enterprise Pension Fund Business Data for the First Quarter of 2025", adding a new item "Cumulative Return Rate in the Past Three Years" in the investment management section. The National Enterprise Pension Fund has announced for the first time the cumulative return rate over the past three years, indicating a positive long-term shift in the investment assessment orientation of the national enterprise pension fund. It is expected that the long-term assessment mechanism of more than three years will gradually be implemented. ”Chen Li said. In Dong Zhongyun's view, the "Implementation Plan" establishes a long-term assessment mechanism that matches the characteristics of long-term funds, enabling long-term funds to be more focused on long-term stable development without fear of short-term fluctuations, effectively alleviating the "investment term mismatch" dilemma of long-term funds due to short-term performance pressure and excessive attention to short-term trends, significantly improving the tolerance of funds for equity asset fluctuations, and making "long-term investment" more feasible. The reform of the assessment mechanism will reduce short-term performance pressure and promote the gradual shift of insurance funds, enterprise annuities, pension funds, etc. towards long-term investments. ”Tian Lihui, a finance professor at Nankai University, stated that medium - and long-term funds such as insurance and pension funds have injected over trillions of yuan in incremental funds into the A-share market through measures such as relaxing the upper limit of equity investment ratios, extending assessment cycles, and innovating products, driving the market from a "scale oriented" to a "value oriented" approach. Thirdly, the "Implementation Plan" proposes to "optimize the investment ecology of the capital market. Guide listed companies to increase their share repurchase efforts and implement a policy of multiple dividends per year. Promote listed companies to increase their share repurchase and increase their holdings through the use of refinancing tools." Dong Zhongyun stated that the "Implementation Plan" optimizes the investment ecology of the capital market, which can improve the quality of listed companies on the asset side and enrich products suitable for medium and long-term capital investment and smooth out market fluctuations on the trading side, significantly reducing institutional barriers to medium and long-term capital entering the market. Chen Li believes that under the relaxation of policies, the upper limit of the equity investment ratio of insurance funds has been increased, the personal pension system has been expanded, the admission of qualified foreign institutional investors and RMB qualified foreign institutional investors (QFII/RQFII) has been simplified, and product innovation and upgrading, as well as the expansion of theme funds and REITs on the Science and Technology Innovation Board, have provided more investment choices for medium and long-term funds, meeting their diversified risk return preferences and asset allocation needs. Since the issuance of the Implementation Plan for Clearing Blockages and Optimizing the Market Ecology, significant achievements have been made in accelerating the entry of medium and long-term funds into the market and building a "long-term investment" market ecology. At present, there are still some urgent issues that need to be improved in terms of investment scope, product supply and demand matching, as well as assessment and incentive mechanisms for medium - and long-term funds entering the market. Regarding this, Chen Li analyzed that in terms of investment scope, some medium - and long-term funds are restricted by access or investment ratios in areas such as private equity funds and alternative investments, making it difficult for them to fully participate in investments in emerging markets or specific fields, which is not conducive to diversified asset allocation and obtaining higher long-term returns. Dong Zhongyun believes that the proportion of institutional investors in the A-share market is still relatively low, and there is a long-term problem of high volatility in the market, which has led to increased short-term performance pressure on institutions. Medium - and long-term funds have to adopt short-term operations, which conflicts with the characteristics of long-term funds and affects their stability. At the same time, there is still room for improvement in the quality and governance level of A-share listed companies, and the lack of stable cash flow returns for long-term funds has reduced their motivation to allocate to A-shares. In terms of product supply and demand matching, Chen Li believes that the types and quantities of products suitable for medium and long-term funds in the market are still relatively limited, making it difficult to meet the risk preferences and return goals of different medium and long-term funds. Dong Zhongyun stated that there is a mismatch between market product supply and investor demand. The supply of equity products is still insufficient, especially the lack of low volatility, high dividend products suitable for holding medium and long-term funds, which affects the willingness of long-term funds to enter the market and investment efficiency. In addition, Chen Li stated that the long-term assessment mechanism for more than three years is currently being explored and established, and the assessment indicators of some institutions are still not scientific and reasonable enough. The weight of long-term investment performance assessment needs to be further improved, and the balance with short-term performance assessment still needs to be optimized. The incentive mechanism for investment management personnel and long-term investment performance assessment also need to be further improved. In response to the above issues, Chen Li believes that the next step is to further optimize the policy guidance for the entry of medium and long-term funds into the market from two aspects: on the one hand, expand the investment scope and variety, gradually relax the investment scope restrictions for medium and long-term funds, allow them to participate in more diversified investment varieties and fields, such as increasing the proportion of investment in private equity funds, venture capital, green financial products, etc. At the same time, encourage financial institutions to innovate and develop products and services suitable for medium and long-term funds, and meet the allocation needs of medium and long-term funds; On the other hand, we need to strengthen market cultivation and ecological construction, further improve the basic system of the capital market, enhance market transparency and efficiency, increase market attractiveness and stability, encourage listed companies to improve quality, strengthen dividend and repurchase efforts, and provide better investment targets for medium and long-term funds. Dong Zhongyun stated that in response to the current bottlenecks in the entry of medium and long-term funds into the market, it is necessary to further deepen the comprehensive reform of investment and financing. Firstly, further improve the long-term assessment mechanism and incentive mechanism for more than three years, refine specific standards, avoid a one size fits all approach, improve the compensation system and incentive measures for institutional managers, and make them more closely linked to long-term performance, so as to truly play a role in guiding long-term investment; Secondly, we will continue to enrich the innovation of financial products, increase the innovation of equity products, and develop more products suitable for medium and long-term capital holding. At the same time, encourage the development of passive investment products such as index funds and ETFs, reduce transaction costs, and improve investment efficiency. In Tian Lihui's view, optimizing policy guidance for the "long-term investment" mechanism requires collaborative efforts from multiple sources. Expanding exit channels such as REITs and mergers and acquisitions can enrich derivative tools, dynamically adjust regulatory rules, gradually increase the upper limit of investment in insurance stocks, strengthen cross departmental cooperation, support tax incentives and risk compensation policies, reduce long-term capital entry costs, and ultimately form a "stabilizer" and "ballast" effect. (New Society)