China Investment fund reverses loss to earn 11 per cent on foreign assets

PUBLISHED : Sunday, 09 June, 2013, 12:00am
UPDATED : Sunday, 09 June, 2013, 8:46am

China's sovereign wealth fund, China Investment Corp (CIC), says its return on overseas investment was about 11 per cent last year, reversing a loss in 2011, in part due to its diversified investment portfolio.

Gao Xiqing , CIC's vice-president, was quoted by Xinhua as saying that the fund's total assets - 40 per cent of which are invested abroad - grew to US$500 billion in 2012 from US$482 billion in 2011.

"The investment return in the past five years has surpassed previous expectations a little bit, but not that much," Gao was quoted as saying. On a cumulative annualised basis since CIC's founding, its overseas return was above 5 per cent by the end of last year, he said.

Created in 2007, the sovereign wealth fund was tasked with earning higher returns from riskier investments using part of China's foreign exchange reserves, which at US$3.44 trillion are the world's largest.

In 2011, CIC suffered a 4.3 per cent loss on its international portfolio, partly due to weakness in energy and resource stocks as the European debt crisis and US debt downgrades roiled markets.

Gao said CIC could manage more funds in future as its capital amount had yet to reach the optimum point.

The fund received US$30 billion of new funding in 2011 from the State Administration of Foreign Exchange, the mainland's top foreign exchange regulator.

China Investment Corp is still seeking a chairman after Lou Jiwei left to become finance minister.