CIC Reports Annualised Net Return of 6.57% in 2023

The overseas investments of China Investment Corporation (CIC), a sovereign wealth fund (SWF) that manages part of China’s foreign exchange reserves, has reported a 10.7% growth in 2023 and achieved a 10-year cumulative annualised net return of 6.57%, outperforming its long-term performance benchmark by approximately 31 basis points.

Notwithstanding rising trade tensions between the US and China, CIC’s Distribution of the Global Investment Portfolio: Public Equity as of 2023-end showed that 60.29% of investments were made in the US, 25.58 in non-US developed markets and 14.13% in emerging markets and others, the report revealed.

In its annual report for 2023, which was released last week-end, CIC said that the state-owned financial capital under Central Huijin’s stewardship reached $910 billion, a 9.4% increase from the beginning of the year. CIC’s total assets stood at $1.33 trillion, with net assets of $1.24 trillion.

Currently, CIC’s global portfolio consists of public equity, fixed income, alternative assets, and cash products and others, respectively accounting for 33.13%, 16.46%, 48.31%, and 2.10%, CIC said in the report.

The report further said that 2023 marked the launch of the CIC Strategic Plan 2023-2025 and Visionary Goals 2030.

“In a volatile global environment presenting both risks and opportunities, we adhered to our position as a long-term institutional investor and anchored our efforts to strategic objectives, balancing development with security. We continually optimised asset allocation and investment strategies, enhanced our stewardship of state-owned financial capital, and successfully achieved our key operational targets for the year. This ensured a strong start to our new strategic plan,” CIC explained.

On enhancing corporate governance capabilities, CIC has refined Board operations, delineated responsibilities across governance bodies, and empowered Board committees which improved its overall governance effectiveness.

On strengthening investment capabilities, CIC stayed true to its identity as a long-term investor. Amid market volatility, CIC judiciously enhanced its capabilities across asset allocation, investment management, risk control, and operational support.

CIC’s Domestic Equity

On domestic equity management, CIC emphasised its role in capital stewardship, innovated its approach to performing duties and exercising rights, strengthened team of appointed directors, and expanded equity management toolkit.

“These efforts positioned Central Huijin as a more effective trustee of state-owned financial assets, better equipped to meet current challenges and requirements. As an active shareholder, we guided our portfolio institutions to excel in financial development, while broadening and deepening support for the real economy,” CIC said in the report.

CIC’s Risk Management

On risk management, CIC enhanced its risk management governance structure, enhancing synergies across the “three lines of defense.”

“We reinforced our comprehensive risk management system, and strengthened risk prevention and control with a focus on key areas, integrating management of traditional and non-traditional risks to safeguard high-quality development. We fortified our risk prevention and control system for greater comprehensiveness and effectiveness and successfully held the line against any major risk events despite the complex, trying environment,” the corporation said.

On sustainable development and corporate social responsibility, CIC developed a distinctive sustainable investment model, capitalising on global green transition opportunities.

CIC formulated a carbon neutrality action plan to advance carbon neutrality in its operations and integrated carbon peaking and carbon neutrality goals into its rural revitalisation initiatives, leveraging expertise to provide targeted support through concrete actions.

On global outreach and international cooperation, the CIC has endeavoured to promote a more open, inclusive, and equitable international investment environment through participation in intergovernmental financial dialogues, international conferences, and peer exchanges, as well as active engagement in the International Forum of Sovereign Wealth Funds (IFSWF) and the BRICS Women’s Business Alliance.