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August 8, 2009

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CIC loses 2.1% on its global portfolio

CHINA'S sovereign wealth fund said yesterday it lost 2.1 percent last year on its global portfolio and defended its performance as being better than other SWF amid worldwide financial turmoil.

China Investment Corp slowed its investment pace from July 2008 in the face of the global economic downturn. As the overall economy improves, CIC would become more active investing overseas, said a senior official.

He said CIC would stick to prudent and secure investment principles this year as before. CIC had now begun to open new positions in the global market after reducing investment to minimize the downturn's impact.

Aiming at long-term investment returns, CIC will strategically adjust its investment according to specific economic situations. Each investment decision would be made considering relevant conditions as the global picture did not always reflect the true situation in certain countries or economic sectors, he said.

The return on the global portfolio last year was minus 2.1 percent, but CIC outperformed other SWF, university endowments and pension funds, CIC said in its first annual report.

The report said CIC invested cautiously last year and ended the year with about 87.4 percent of its assets in cash and cash products.

With sufficient capital for investment, CIC is well positioned for the remainder of this year, the report said.

Despite the negative portfolio return, CIC attained a return on its registered capital of 6.8 percent as Central Huijin, a wholly owned subsidiary of CIC, saw huge growth in the value of its investments in China's financial institutions, Lou Jiwei, chairman and CEO of CIC, said in the report.

The CIC has US$200 billion in registered capital, of which slightly more than 50 percent was used for global investment and the balance for investment in domestic financial institutions by Central Huijin.


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