China's CIC 2012 return on overseas investment turns positive

BEIJING, June 8 Sat Jun 8, 2013 1:51am EDT

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BEIJING, June 8 (Reuters) - China's sovereign wealth fund, China Investment Corp (CIC), said its return on overseas investment swung to around 11 percent in 2012 from a loss in 2011, in part due to its diversified investment portfolio.

Gao Xiqing, vice-president of CIC, was quoted by the official Xinhua News Agency as saying that the total assets of the fund have increased to $500 billion from $482 billion in 2011, 40 percent of which are invested overseas.

"The investment return in the past five years has surpassed previous expectations a little bit, but not that much," Gao was quoted as saying.

Created in 2007, the sovereign wealth fund was tasked to earn higher returns from riskier investments using part of China's foreign exchange reserves, which at $3.44 trillion are the world's largest.

On a cumulative annualised basis since CIC's founding, the fund's overseas return was above 5 percent by the end of 2012, Gao said.

In 2011, the CIC suffered a 4.3 percent loss on its international portfolio partly due to weakness on energy and resource stocks as the European debt crisis and U.S. credit rating downgrades roiled markets.

Gao said CIC could manage more funds in future as its capital amount has yet reached the optimum point.

The fund received $30 billion in new funding in 2011 from the State Administration of Foreign Exchange, the country's top foreign exchange regulator.

The fund is still seeking a chairman after Lou Jiwei left to become China's finance minister. (Reporting By Xiaoyi Shao and Jonathan Standing; Editing by Jeremy Laurence)

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