China Investment Corp. is looking for more resilient assets in markets battered by the coronavirus pandemic as the nation’s $941 billion sovereign wealth fund seeks to boost long-term returns, Executive Vice President Zhao Haiying said.
The Beijing-based company added to its investments in credit markets in recent months, especially investment-grade loans in the U.S., after the Federal Reserve eased a liquidity crunch, Zhao said in an interview with Bloomberg News on Saturday. CIC, as the fund is known, also bolstered holdings in healthcare and information technology stocks and added exposure in regions like Asia where there was “less uncertainty” about the spread of the virus, she said.
CIC, led by Chairman Peng Chun, is finetuning its investment strategies. It sees a diversified portfolio as the best way to weather its biggest test since inception in 2007. A plan toboost alternative and direct investments to 50% of global assets by the end of 2022 remains unchanged, with the private portfolio, which includes real estate and private equity, avoiding any “serious damage” even as cash flows slow, Zhao said.
“As a long-term investor, we want to invest in growth,” Zhao said in Beijing. “Given the many external shocks, you need to be more focused on the more resilient areas, strategies and themes, and avoid fragile areas.”
23,790 in U.S.Most new cases today
-14% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-4.8% Global GDP Tracker (annualized), April