While Adia's 20-year annualised rate of return for 2013 was marginally down from 7.6 per cent in 2012 its 30-year annualised return edged up to 8.3 per cent from 8.2 per cent in the same period.
The Abu Dhabi headquartered SWF's performance is measured based on underlying audited financial data and calculated on a time-weighted return basis. Approximately 75 per cent of Adia's assets are managed by external fund managers whose activities are subject to careful oversight and around 55 per cent of its assets are invested in index-replicating strategies.
Adia carries out its investment programme independently and without reference to the Government of Abu Dhabi. It has no visibility on either the spending and revenue requirements of the Government of Abu Dhabi and its assets are not classified as international reserves.
Last year was a year of continued consolidation and growth for Adia, both internally and in the markets where it invests according to
Adia manages a global investment portfolio that is diversified across more than two dozen asset classes and subcategories. Its investment decisions are based solely on its economic objectives of delivering sustained long-term financial returns. "In an ever-changing world, Adia's approach must be one that emphasises continuity over short-term gains," said
According to Adia's assessment, across the developed markets, 2013 was another good year for equities. Measured in US dollar terms, stocks gained more than 30 per cent in the US and over 25 per cent in both
In the US, fears that fiscal tightening would derail growth proved unfounded. At the same time, gains in
These better outcomes led markets to question whether the stimulative policies put in place since the global financial crisis could be nearing their turning point. Such concerns were most apparent in the US, where the Federal Reserve began considering how and when to finish its programme of bond purchases.
Bond markets found this combination of better growth and reduced policy support worrisome: yields across developed markets jumped in the summer, and global indices ended the year with small losses — the first negative total returns in 20 years.
According to Adia's assessment Global emerging markets too reported strong performance last year with MSCI World Index posting an overall 23.4 per cent rise in 2013, its best performance since 2009.
Emerging markets proved especially sensitive to signs that monetary stimulus may have peaked. Low yields in the developed world had encouraged capital to flow to emerging economies in search of better returns. Later in the year a reversal of these flows depressed currencies across the emerging world, especially in those countries that had large current account deficits. In addition, emerging economies generally delivered growth in line with or slightly below expectations.
"Despite short-term setbacks, emerging markets, and particularly
According to Adia, beyond
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