He Fan: National Foreign Exchange Investment Is Not Enough To Win Risks.

Since its establishment, China Investment Co has aroused great disturbances.

People wonder whether it is a fierce white shark in the international financial market or a mild blue whale?

Today, investment companies are still enveloped in a mysterious color.

Because of the opaque investment strategy and purpose of China Investment Co, these investment companies have attracted attention or boycott abroad.

Developed countries and the International Monetary Fund are actively planning to set rules for sovereign wealth funds.

In March 2008, the United States and the United Arab Emirates of Singapore and Arabia reached an agreement on the investment criteria of sovereign wealth funds.

Under the agreement, sovereign wealth funds' outward investment should be for commercial purposes and not for political purposes.

Sovereign wealth funds must strengthen information disclosure, implement fair competition and abide by the regulatory measures of investment countries.

It is reported that this agreement will be the blueprint for IMF to make rules for sovereign wealth funds in the future.

Against this background, the space for China Investment Co to travel alone will be less and less.

　　明確投資策略

Improving the pparency of policies will help enhance credibility and enhance cooperation and ultimately bring greater room for action to China's investment companies.

To improve policy pparency, we must first clearly position investment companies' investment objectives and strategies.

In the discussion of investment companies, the most popular view is to allocate assets for the long-term strategic allocation of the country.

For example, the purchase of strategic resources or high-tech, some views emphasize investment companies must have a higher return on investment.

Unfortunately, the more investment with national strategic intentions, the easier it is to incur overseas dissatisfaction.

At the same time, in the pursuit of strong incentives for high returns, it is also easy to take risks and increase the possibility of potential losses.

The first meaning of investment is not to lose money. For a company running state wealth, it should be more cautious.

The goal of investment companies should be to keep some of their foreign exchange reserves in value and value.

In the long run, if the investment in foreign exchange reserves has brought strategic benefits to China, this return can only be an extra reward rather than a direct goal.

We hold foreign exchange reserves in order to eventually import goods and services from foreign countries with foreign exchange reserves.

Therefore, measuring the value and value added of foreign exchange reserves should be based on their actual purchasing power instead of a single monetary standard.

If RMB is considered as the standard, considering the expectation of appreciation, the overseas investment of investment companies should be at least 15%, which is obviously unrealistic.

If the US dollar is the standard, considering the depreciation of the US dollar relative to other currencies such as the euro and yen, even if the return of US dollar is higher, the purchasing power of foreign exchange reserve will still be reduced.

Therefore, a more appropriate criterion is to calculate the purchasing power of foreign exchange reserves in a basket of currencies according to China's import demand.

When measuring the performance of investment companies, a more reasonable weighting index should be rebuilt.

Investment strategies of investment companies should be as simple and simple as possible.

The investment strategy of investment companies is to persist in long-term investment, and the two is to be good at hedging risks.

　　堅持長期投資

In theory, the strategy of sovereign wealth funds will not differ from ordinary mutual funds or pension funds. They need to build portfolios in different markets and different assets to control risks and maximize the overall revenue.

Unlike private investors, sovereign wealth funds should be more patient and focus on long-term stable returns.

This requires different standards of performance evaluation for investment companies.

Using the whip of yield, competition between a long distance running sovereign wealth fund and a sprint private fund will kill a marathon runner on the 100 meter runway.

From the perspective of long-term investment, we should pay attention to: first, equity investment is far higher than bond returns in the long run. Therefore, there should be more equity assets in the portfolio of investment companies.

Investment companies should insist on "investors who are reluctant to give up". Moreover, passive regular investment can make investment companies more confident and able to win the market.

Second, judging from the current market, although the prices of primary commodities such as oil, steel and even agricultural products have risen sharply, the price of commodities will probably fall from a longer period of time, and the return on investment of commodity futures is far lower than that of equity investments.

Therefore, the long-term way to hedge oil prices and primary product prices is not to directly hold these commodities, but to hold shares of the enterprises that produce them.

　　善于對沖風險

Sovereign wealth funds are also good at hedging risk.

It is meaningless to buy overseas strategic resources to reduce China's resource shortage and energy security.

For example, even if China buys oil fields in Africa, we can not be sure when African countries will make foreign investment nationalized.

The more oil prices go up, the stronger the impulse to nationalize.

Moreover, even if we have overseas oil fields, no strong navy and control over the channel and the Straits, we can not pport overseas oil back to China.

However, through external investment, it can better hedge the potential risks in China's economic growth.

Assuming that oil prices are rising, China's import costs will rise. If China has shares in overseas oil companies, the gains from investment may make up for the increase in import costs.

This idea can be used in many ways.

Assuming that the renminbi will continue to appreciate, China's export enterprises will suffer losses, but other countries exporting to China will make profits.

China's financial enterprises are weak in competitiveness and may be hit by foreign competitors in further opening up.

However, we can buy more shares of overseas financial institutions and subsidize domestic financial enterprises with investment income.

Some scholars in the world have tried to introduce risk hedging into the management strategy of foreign exchange reserves.

If a country holds foreign exchange reserves in order to protect itself and prevent foreign exchange reserves from being depleted when large capital flight occurs one day, risk hedging can be done through the establishment of an appropriate portfolio.

Assuming capital flight, the fuse should be a recession in China's economy, a sharp fall in the stock market or the real estate market, or the end of the appreciation of the renminbi.

In response to these potential risks, we can increase investment in countries, industries and companies that are positively correlated with China's economic fluctuations and even negatively related.

For example, the decline in China's exports may mean an increase in Mexico's exports, and the decline in China's clothing industry may mean that the garment industry in Bangladesh is booming.

We can also buy put options or short index futures on China's stock index.

Of course, the risk of shorting is far greater than that because there is no limit to the price increase.

If we do not win the risk of chess, maintain a calm attitude and follow a plain style, we may lay the firm and popular position of investment companies in the international financial market.