China’s sovereign fund suffered investment losses in 2022 on global market turmoil, eroding assets and returns
- Assets shrank by 8 per cent to US$1.24 trillion last year, largely due to fair-value impairment to investment holdings
- Fund’s 10-year annual rolling returns narrowed to 6.43 per cent from 8.73 per cent in 2021
The losses, while not publicly disclosed, narrowed the fund’s 10-year rolling returns to 6.43 per cent, from 8.73 per cent as of end-2021, in US dollar terms. Annualised net returns since its 2007 inception stood at 5.94 per cent last year, versus 7.22 per cent in 2021, according to its annual reports.
“We have continued to refine our asset allocation and investment strategy, worked to enhance total portfolio resilience, intensified risk prevention and mitigation in critical areas, and delivered market-beating annual investment returns,” Peng Chun, chairman and CEO, said in the report. “We carried out portfolio rebalancing and strategy refinements in an orderly manner despite prolonged volatility in international financial markets.”
2022 was a brutal year for global investors, with stocks and bonds battered by China’s Covid-induced slowdown, while the Federal Reserve began its most aggressive policy tightening in more than four decades to cool runaway inflation. The MSCI World Index of stocks slumped 20 per cent, while the ICE BofA global bond benchmark slumped 17 per cent last year.