On December 1, China Investment Corporation (CIC) released its 2022 Annual Report (the "Report").
Peng Chun, Secretary of the Party Committee and Chairman of CIC, pointed out that since its establishment in 2007, the cumulative annualized state-owned capital appreciation rate of CIC has been 12.2%.67%；As of the end of 2022, the annualized net return on CIC's outbound investments over the past decade was 6.0% in US dollars43%, 26 basis points above the 10-year performance target.
In terms of investment strategy, CIC implemented portfolio adjustments and strategy optimization in 2022, made steady progress in its investment portfolio, achieved the asset allocation target of 50% of alternative asset investment, and continuously improved the resilience and quality of its total portfolio, while also carrying out thematic investments such as climate change and energy transition.
The 10-year annualized return is 643%
According to the report, in early 2013, CIC introduced a policy portfolio to connect strategic and tactical asset allocation, forming a three-tier structure of "strategic asset allocation, policy portfolio, and tactical asset allocation", and the allocation structure was further improved.
Since 2016, the Company has adopted the "Reference Portfolio-Policy Portfolio-Actual Portfolio" structure to carry out allocation management for the total portfolio, continuously optimize the strategy and benchmark settings around the reference portfolio structure, revise the management mechanisms such as rebalancing, and further improve the efficiency of asset allocation and the transparency and discipline of the total portfolio management.
At the beginning of 2020, CIC established the Asset Allocation and Investment Policy Committee and the Asset Allocation and Business Coordination Department to coordinate and manage the overall foreign investment portfolio, giving full play to the role of asset allocation in implementing strategies and driving investment.
Peng Chun said that in 2022, in the face of the turbulent international environment and unprecedented challenges, the company maintained its strategic focus, gave full play to the advantages of long-term institutional investors, continuously optimized asset allocation and investment strategies, and focused on improving the resilience of the total portfolio, with annual investment income outperforming the market.
According to the report, given the nature of CIC's long-term investors, the board of directors of CIC has extended the investment review cycle to 10 years, and has made the rolling annualized rate of return an important indicator for evaluating investment performance.
As of December 31, 2022, CIC's cumulative annualized net return over the past 10 years was 6.43%, exceeding the assessment benchmark by 26 basis points, and completing the ten-year investment performance appraisal target;The cumulative annualized net return since inception is 594% (all in US dollars).
The resilience of the asset portfolio has been improved, and the investment in climate change and energy transition has been actively carried out.
According to the report, in 2022, in terms of its outbound investment strategy, CIC implemented portfolio adjustments and strategy optimization in an orderly manner, made steady progress in its investment layout, achieved the asset allocation target of 50% of alternative asset investment, continuously improved the resilience and quality of its total portfolio, and actively carried out thematic investments such as climate change and energy transition.
According to the report, as of the end of 2022, the proportion of CIC's overseas portfolio in the public markets** of the US**, non-US developed**, emerging markets** and others was .81% and 1401%。
By industry type, as of the end of 2022, information technology, finance, healthcare, consumer discretionary, and industrials were the top five sectors in the open market** of CIC's overseas portfolios. Among the fixed income types of overseas investment portfolios, CIC's holdings of developed sovereign bonds, emerging sovereign bonds, and corporate bonds account for .7% and 2612%。
According to the report, in recent years, in the face of a complex external environment, CIC has adhered to its position as a long-term investor, focused on strengthening overall management and enhancing professionalism, improved its outbound investment management mechanism and comprehensive risk management system, optimized asset allocation and portfolio management, and ensured the orderly operation of its portfolio in a crisis-prone market.
According to the report, in terms of domestic equity management, ** Huijin Company, a subsidiary of CIC, has promoted the controlling and shareholding institutions to continuously improve the quality and efficiency of serving the real economy, and fully supported the steady growth of the economyActively innovate and improve the "Huijin model", promote the optimization of the layout of state-owned financial capital, and participate in the rescue of problematic financial institutions in a market-oriented mannerConsolidate the responsibilities of dispatched directors to perform their duties independently, and continuously improve their ability to perform their duties in an institutionalized manner.
Peng Chun said that in terms of sustainable development, CIC has formulated opinions on the implementation of carbon peaking and carbon neutrality goals and sustainable investment actions, released an operational carbon neutrality action plan, and clarified the timetable and roadmap to achieve energy conservation and emission reduction goals.
The report further points out that in 2022, CIC leveraged the advantages of its quantitative platform and used open market carbon data as an entry point to produce a series of research results in carbon measurement, green investment classification, and green and low-carbon investment solutions.
For example, in terms of bonds and absolute returns, CIC has increased its investment in green bonds that meet the requirements of the risk guidelines without affecting portfolio liquidity and yieldAt the same time, explore carbon management tools such as carbon emissions** to reduce the combined carbon footprint.
Editor-in-charge: Wang Yunpeng.
Proofreading: Liao Shengchao.