China investment Corporation, which manages the national welfare Fund in 2015 for the first time in four years, received a negative income from foreign investments on the background of high volatility of international financial markets, falling commodity prices, and losses related to the weakening of the yuan against the dollar.
As stated in the annual report, the profitability of the global portfolio of foreign investments amounted to 2,96% against of 5.47% a year earlier. Net income of corporations fell by 17%, to $73.9 billion, the Average annual return on foreign investment since the founding of the Corporation in 2007 made up 4.58% (5.66 per cent in 2014).
The total assets of the Corporation in the past year increased by 9%, from $746,7 in 2014 to $813,8 billion, the Annual growth rate of assets of the Corporation since its inception has amounted to 15.3%.
By the end of 2015 in a global investment portfolio of the Corporation a share of stock was $ 47,47%, bonds — of 14.44%, long-term investments — the 22.16%. The yields of shares and bonds fell amid negative interest rates and the strengthening of the dollar to the yuan.
For the global economy and for corporations 2015 year has been difficult, says the head of the state investment Fund Ding xuedong: fell global stock market indices, prices fell for raw materials, cheaper assets in developing markets, the dollar strengthened against other currencies. “The economic recovery continued at a slow pace, in the international financial markets experienced significant deflection, whereas the competition in the field of investment has become even fiercer,” explained Xuedong.
According to him, the global economy is in a phase of deep adjustment after the financial crisis. In 2016 will continue the trend of slow economic growth, weak inflation, low productivity and weak trade.
The Corporation “not so bad” indicators for 2015, “given the high volatility in the financial markets last year and slow inflation”, quotes Bloomberg an analyst of Z-Ben Advisors johnny Fan. He recalled that other sovereign wealth funds also finished the year with negative returns. “The index of long-term profitability is very good, considering that the aim of the Fund is to maintain the real value of their foreign currency reserves”, — he said.
China investment Corporation established in 2007 to manage international assets. At the time of the founding of the company in 2007, its capital amounted to $200 billion.
The Corporation invests in various financial products worldwide, including public companies ‘ shares, bonds (sovereign, Agency and corporate), hedge funds and funds of mixed investments, cash, ultra short-term deposits, bonds U.S. Treasury, as well as makes long-term investments (commodities, real estate and infrastructure). As at the end of 2015, 67% of all assets were placed abroad, 33% — in the country.