Global market volatility is taking a toll on institutional investors, including sovereign wealth funds like China Investment Corporation (CIC), even though it outperformed its target for 2018. The state fund took a 2.35 percent loss on its overseas investments in 2018, and it might not be rebound soon.

Major stock markets are suffering the worst year in a decade. 2018 is the fourth year for CIC's negative net return in the past 11 years, a far cry from the record 17.59 percent gain back in 2017. Since the trade dispute and the global political unrest, the net profit in 2018 was about 65 billion U.S. dollars, 37.22 percent down from 2017.

However, CIC's long-term returns outlook remains stable. The fund did manage to post more than six percent 10-year annualized return, beating expectations. While there still have reasons to be concerned going forward as Peng Chun, chairman and CEO of CIC said the "global economy and financial situation is complicated" right now.

"Capital markets are in turmoil. The pressure on asset prices is growing. Overall, the investment environment is harsher this year thanks to unilateralism, slowing global growth and tighter regulatory oversight in advanced economies on foreign investments. We feel a lot of pressure," Peng said.

Among the diversified investment, a key focus is the CIC's U.S. investments. The fund has been investing in assets across the board, from stocks, debt, private equity, hedge fund, to property and infrastructure. But, how to cope with the China and the U.S. trade war is the biggest challenge for CIC right now.

Ju Weimin, vice president of CIC said that the trade war is making CIC more cautious about investing in the U.S. But the fund will not pose a threat to the countries it invests in.

"We insist on legal compliance and will always be a financial investor only and never interfere with the management of the investees. Meanwhile, we will reduce the riskiest assets in our portfolio, and keep investing in manufacturing, technology and healthcare," he added.

As an alternative, the fund continues to look at the Belt and Road Initiative (BRI). The fund's executives said that they had invested in 44 projects worth 26 billion U.S. dollars at the end of August. And the infrastructure, logistics, technology and energy under BRI will be the most relevant opportunities for CIC.

(CGTN's Xia Cheng also contributes to the story.)