China's social security fund had an annualized rate of return of 18.61 percent in the stock market from June 2003 to the end of last year.
The return on the fund's total investments rose at an annualized rate that was 10 percentage points lower during that period.
The national manager of the fund promised to keep making cautious investments to reap a steady income in the long run.
From stock investments, the fund made 132.6 billion yuan ($20.9 billion) from June 2003 to the end of 2011. That accounted for 46 percent of the social security fund's total investment income, Dai Xianglong, chairman of the National Council for Social Security Fund, said on Thursday in Beijing.
During that period, an average of 19.22 percent of the investments from the fund were put into stocks, according to the council.
"If we purchase stocks at reasonable prices and insist on making long-term investments, the return can be expected to be higher than it would be from fixed-income instruments, although investment income has fluctuated much more in the share market," Dai said.
Last year, the social security fund's investment income increased to 43.1 billion yuan from 32.1 billion yuan in 2010, achieving a return rate of 5.58 percent. That was 1.36 percentage points higher than a year earlier, according to a statement released on the fund management council's website.
By the end of 2011, 868.9 billion yuan of the fund's money had been invested. Of that, 32.39 percent had been invested in stocks, 50.66 percent in fixed-income instruments and 16.31 percent in industry, the statement said.
Money from the social security fund is welcome in the stock market, Guo Shuqing, the chairman of the China Securities Regulatory Commission, has said many times in public speeches.
Even so, Dai said the council will "always be cautious toward stock investments and make sure that it can have steady and relatively higher returns".
Li Yining, an economist with Peking University, said a special management mechanism should be adopted to bring risks to the social security fund under as much control as possible.
In the past 11 years, China's national social security fund has earned 284.7 billion yuan, having an annualized return rate of 8.41 percent, 6 percentage points higher than the average rate of inflation during the same period, according to the statement.
Dai vowed to examine plans for making investments of the fund more strictly. Another top goal will be to further increase the fund's returns, the statement said.