Big Yields, Old Questions at a Sovereign Fund

En route to another double-digit annual return, China's sovereign wealth fund China Investment Corp. (CIC) last year expanded long-term asset and direct investments while reducing the cash percentage of its global portfolio.

Also noted in CIC's recently released financial report for 2010 –  its third year in business – was a board of directors decision to set targets for cumulative, annual return rates. The board also decided to extend an investment assessment cycle to 10 years from five.

"This change better fits CIC's positioning as a long-term institutional investor and increases its tolerance for short-term market fluctuations," explained Chairman and CEO Lou Jiwei at the fund's annual meeting.