China's 300-billion-dollar sovereign wealth fund recorded a double-digit return on its overseas investments in 2009, state media said Thursday, reversing a decline in the previous year.
China Investment Corporation made 11.7 percent on 58 billion dollars invested overseas last year, the official Xinhua news agency said, citing the fund's annual report.
The figure marked a turnaround from 2008, when the return on the sovereign fund's overseas investments fell 2.1 percent as the global financial crisis savaged markets around the world, Xinhua said.
"The good return shows that our judgement of the market at the beginning of 2009 was quite correct when a pessimistic mood still hovered over it," Jin Liqun, chairman of the fund's board of supervisors, was quoted as saying.
"The objective of CIC's global investment is to achieve an appropriate long-term and risk-adjusted return for its shareholders."
CIC's overall return reached 12.9 percent, taking into account the investment gains of Central Huijin, the fund's domestic arm, which invests in Chinese financial institutions, the report said.
Net profit totalled 41.66 billion dollars in 2009 -- nearly double the 23.1 billion dollars seen the previous year.
CIC's annual report was not immediately available for review.
The fund was established in 2007 to invest overseas some of China's massive foreign exchange reserves -- which stood at a record 2.454 trillion dollars at the end of June -- partly to gain better returns.
The reserves are mainly parked in safe but low-yielding instruments such as US Treasury bonds, but amid the global crisis CIC has tried to diversify its investments and be more aggressive to improve returns.
CIC said 36 percent of its overseas portfolio was invested in equities last year, 26 percent in fixed income securities, 32 percent held in cash and six percent in alternative investments, reflecting a shift to higher-risk assets.
In terms of geographic distribution, nearly 44 percent of CIC's diversified equity investments were in North America.
The Asia-Pacific region attracted 28.4 percent, while Europe had 20.5 percent, and Latin America had 6.3 percent. Africa accounted for just 0.9 percent of those investments.
According to a filing with the US securities regulator, the fund held shares worth a total of 9.6 billion dollars in dozens of US-listed companies including blue-chips such as Coca-Cola, Citigroup and Morgan Stanley at the end of 2009.
Its shares in Canadian resources firm Teck Resources were valued at 3.5 billion dollars, according to the filing with the US Securities and Exchange Commission.
The fund's direct equity holdings in US-listed firms also included shares in steel giant ArcelorMittal, pharmaceutical firms Pfizer and Merck and telecommunications company Motorola and other industry sector leaders.
-- Dow Jones Newswires contributed to this report --
Copyright 2010 AFP Asian Edition
