China’s CIC International posts 9.33% return for 2013

12 August 2014   Category: News, Asia, China, Global   By Hui Ching-hoo

The overseas arm of sovereign wealth fund China Investment Corporation (CIC) secured a return of 9.33%, or net income of US$86.9 billion, for 2013, boosting the fund’s total AUM to US$652.74 billion as of the end of December.

This translated into a net cumulative return of 5.7% since CIC International’s inception in September 2007. 

The result represented steady growth compared to net income of $83.46 billion during the previous year, despite net returns slowing from 10.6% in 2012.  

In terms of asset allocation, CIC placed 40.4% of its portfolio into public equities, while 17%, 11.8% and 28.2% of its investments were allocated to fixed income, absolute return, and long-term investments, respectively.

Its fixed income portfolio had a 44.1% weighting in sovereign bonds of advanced economies, while it allotted 26.8%, 26.5%, and 2.6% of fixed income assets into emerging market (EM) sovereign bonds, investment grade corporate bonds, and inflation-indexed bonds, respectively.  

On the equities front, the fund invested 46.1%, 36.8%, and 17.1% into US equities, non-US advanced economies equities, and EM equities, respectively. All-in-all, the CIC outsourced 67.2% of its overall assets to external managers.

Ding Xuedong, chairman and chief executive officer of CIC, said in the annual report: “In response to the challenging market environment, we will review and build on our experience to formulate a well-defined growth strategy, refine investment skills and pursue structural adjustments to improve corporate governance in line with our investment principles and philosophy as a long-term financial investor.”

He added: “We’re keen to learn and benefit from the best practices and experiences of fine companies from China and overseas alike. And we will explore models of corporation and co-investment with them to pool resources, tap complementary strengths and ultimately seek win-win solutions for all.”