Despite the fact that the 1.53 trillion yuan ($245 billion) National Social Security Fund is allowed to invest in more areas, security and prudence remain the priority of the fund's investment strategy, a top finance official said on Friday.

Wang Bao'an, vice-minister of finance, made the comment when responding to questions over possible increasing risks associated with the expansion of investment. The State Council announced on Wednesday that it will allow the NSSF for the first time to invest in local government bonds, while also investing in more corporate bonds, centrally-administered enterprises, creditworthy private firms, trust loans and interbank certificates of deposit.

Wang clarified that contrary to public perceptions, the NSSF will not invest in massive bonds issued by local government financing vehicles, which are believed to carry higher risk. The fund will only invest in bonds directly issued by local governments.

China this year granted a 600 billion yuan local government bond quota, while the number last year was 400 billion yuan. In comparison, off-balance sheet debt raised by LGFVs as of June 2013 accumulated to 17.9 trillion yuan.

Wang also said the ceiling for NSSF to invest in the stock market was not raised, considering the high volatility there. Investment in corporate bonds are limited to high-grade ones and direct equity investment is constrained to tier-1 subsidiaries of centrally-administered enterprises, and leading private firms.

"The principle of 'security comes first' is unchanged. The standards of investment are unchanged, and supervision over investment is unchanged," Wang said.

Wang Jun, a researcher with the China Center for International Economic Exchanges, a think tank, said the prudence shown by the NSSF is due to its nature. "It's the life-savings of ordinary people. Yield is just one of several criteria to judge its performance."

Also contrary to public perceptions, experts noted, the NSSF is just part of the nation's gigantic pension fund pool. Founded in 2000, the NSSF is a supplementary fund to support China's aging society. It is funded by fiscal allocation from the central government, from the lottery public welfare proceeds, and other sources.

The NSSF gained an 11.4 percent return on investment in 2014, far exceeding inflation levels.

"The chief reason for the NSSF to broaden its investment scope is to 'stabilize the growth', instead of enhancing yield," an editorial by the 21 Century Business Herald on Friday said.

The People's Bank of China on Friday also issued a document to streamline the issuance procedure of the credit asset-backed securities. Qualified issuers are only required to register transactions before issuance, as opposed to the previous system where regulators approved transactions on a deal-by-deal basis.

Meng Jing contributed to this story.