We focus on building a portfolio that generates good long-term real returns with risks that are consistent with our Client’s risk tolerance. This is characterised by the Reference Portfolio, which comprises 65% global equities and 35% global bonds.

The Reference Portfolio is not a performance benchmark for GIC. There may be significant differences in performance between the GIC Portfolio and the Reference Portfolio from time to time.

The risk exposure of the GIC Portfolio and the Reference Portfolio may differ occasionally. We are able to lower our risk exposure when markets are exuberant, or increase our risk exposure when opportunities arise, as part of our disciplined, long-term approach.

Risk management objectives

Our risk management objectives ensure that the risks we take are:

Authorised
Risks taken are in line with our mandate, and within defined bounds authorised by our Client, Board and Management.

Transparent
Key risk attributes and potential downside risks for the portfolio and each strategy are well-understood by our Client, Board and Management.

Controlled
Policies, guidelines and control processes are in place to reduce the likelihood of significant losses, and any reputational impact due to our actions is carefully managed.

Three lines of defence

Our risk management model operates along ‘Three Lines of Defence’ for clarity and transparency in risk ownership and accountability.

Our Approach

Our approach to risk management is multi-pronged. This does not mean that there are no risks within the portfolio, but that risks are well-identified and managed within our established risk tolerance.

• Managing Portfolio Investment Risk
• Managing Legal, Regulatory and Compliance Risks
• Managing Tax Risk
• Managing Operational Risk
• Managing Cyber Security and IT Risk
• Managing Counterparty Credit Risk
• Managing Reputational Risk
• Managing People Risk