Big return puts CIC among world's best

China Investment Corp, the country's sovereign wealth fund, on Friday reported a net annual return of 14.07 percent in overseas investments last year on a US dollar basis, which experts said should rank among the best of the world's comparable institutions.

Comparable institutions refer to sovereign wealth funds and other long-term institutional investors having asset allocation frameworks and risk tolerance similar to CIC's.

The 14.07 percent return in 2020 has sent the net annualized overseas 10-year return to 6.82 percent, beating the 10-year performance target by 128 basis points, CIC said in its annual report.

CIC's investment return last year as a sovereign wealth fund has marked one of the best among comparable institutions, experts said, citing the 13.7 percent return achieved by South Korea's Korea Investment Corp and 10.9 percent of Norway's Norges Bank Investment Management, both on a US dollar basis.

"We were able to post strong results in our overseas investment business despite severe headwinds," Peng Chun, chairman and CEO of CIC, said in a message that was part of the annual report.

According to Peng, undaunted by unprecedented challenges amid COVID-19, the wealth fund remained consistent in its strategic focus and continued to position itself as a long-term institutional investor.

CIC has expedited private market investments last year, with the value of promised private market investments reaching a recent-year high. It also optimized public market investment portfolios, pushed ahead new bilateral fund initiatives, and established a sustainable investment policy framework.

As of the end of 2020, CIC's total assets had grown to $1.22 trillion, compared with $1.05 trillion a year ago, the report said. Its overseas portfolio currently consists of public equity (38 percent), fixed income (17 percent), alternative assets (43 percent), and cash products (2 percent).

CIC's strong investment performance is part of a bigger trend of booming global capital markets strengthening major sovereign wealth funds' investment returns last year as well as in the first half of this year.

The total assets under management, or AUM, of the world's sovereign wealth funds will soon pass $10 trillion, compared with $9.1 trillion in 2020, thanks to the sustained rally in stocks and bonds, according to data provider Global SWF's estimates in July.

Peng said CIC will continue to build itself as a world-class sovereign wealth fund by further strengthening international investment collaborations and developing new modalities for outbound investment.

In terms of domestic investments, the aggregate State-owned financial assets under the management of Central Huijin, CIC's subsidiary dedicated to domestic equity investments, reached 5.19 trillion yuan ($801 billion) as at the end of last year, up 8.6 percent from the beginning of the year.

Jiang Xueqing contributed to this story.