Sovereign fund sees 10.6% return

China Investment Corp, the country’s sovereign wealth fund, achieved a 10.6 percent gain from its global investments in 2012, compared with a 4.3 percent loss in 2011, according to the company’s annual report on Friday.

The cumulative annualized return of CIC’s overseas investments rose to 5.02 percent by the end of last year, from 3.8 percent up to 2011. Net income increased to $77.4 billion, up from $48.4 billion in 2011, the report said.

The better performance was mainly because of higher equity prices in global markets last year, with the company adjusting its investment portfolios, a CIC spokeswoman said.

By the end of last year, the company’s total assets rose to $575 billion from $482 billion in 2011.

On July 5, the State Council, China’s cabinet, appointed its deputy secretary-general Ding Xuedong as chairman of the sovereign wealth fund, filling the vacancy left by Lou Jiwei, who was appointed finance minister in March.

CIC will diversify its foreign exchange funds, increase investment in public equities and look for long-term investment targets with stable returns, the spokeswoman said.

The company, which manages part of the nation’s $3.5 trillion foreign exchange reserves, had invested about 32 percent of its money in public equities and 19.1 percent in fixed-income securities by the end of 2012.

Of the fixed-income securities, 54.7 percent comprised sovereign bonds of advanced economies, including the United States and European countries, while emerging markets comprised 17.5 percent, according to the annual report.

CIC’s investment in the US stock market accounted for 49.2 percent of its funds in public equities.

“We have increased purchases of public equities and steadily boosted long-term investment in infrastructure construction, energy and mineral resources, and real estate,” the spokeswoman said.

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