CIC investment return tops 11% in 2010

BEIJING -- The China Investment Corporation (CIC), the country's sovereign wealth fund, said on Tuesday it made a return of 11.7 percent on its global investment portfolio in 2010 although the investment environment was complicated by various factors.

The rate was unchanged from the 2009 level, reversing losses in 2008 when the rate was negative 2.1 percent, the CIC said in its third annual report.

The fund's investment return totaled $55.39 billion last year, up from $44.88 billion in 2009.

Its net profit jumped to $51.56 billion from 2009's $41.66 billion, the report said.

The CIC said the average investment return since its founding in 2007 was 6.4 percent, according to the annual report.

Looking back, "the international investment environment is complicated and there is uncertainties in global economic recovery and growth," CIC chairman Lou Jiwei said, citing a global inflationary pressure fueled by soaring commodity prices and Eurozone sovereign debt crisis.

Lou said the corporation was "cautiously optimistic" about this year's investment outlook as the global economic recovery will continue to recover but the process will be rocky.

The CIC made $35.7 billion of new investments last year, after adding $58 billion in 2009.

Its global investment portfolio, which consists of assets such as cash and equities, totaled $135.1 billion at the end of last year, it said.

According to the annual report, the CIC increased its equity investments to 48 percent of its portfolio in 2010 from 2009's 36 percent while raising the proportion of alternative investments to 21 percent from 6 percent in 2009.

Meanwhile, the corporation slashed the proportion of cash to 4 percent at the end of last year from 32 percent in 2009, while that for fixed income securities rose to 27 percent from 26 percent.

The CIC diversified its portfolio last year, increasing investments in sectors such as property markets and infrastructure, spokesman Wang Shuilin said.

The fund also boosted its investments in emerging market countries, Wang said.

The CIC was founded in September 2007 with a registered capital of $200 billion  from China's huge foreign exchange reserves.

At the end of June, the country's foreign exchange reserves hit $3.1975 trillion, up 30.3 percent year-on-year, according to statistics from the People's Bank of China, or the central bank.